Empirical essays on globalization and international trade

This dissertation comprises two essays focusing on how globalization disproportionately affects individual- and aggregate-level welfare through trade or environmental policies.;Globalization has stimulated firms to relocate their production facilities to foreign countries. A plausible dirty secret behind the factor movements is so called pollution haven hypothesis (PHH), by which firms tend to migrate into developing countries to emit pollutants more freely. Researchers have long been trying to find evidence for the PHH in the data, however the literature has not yet reached a consensus on whether polluting firms really seek out a pollution haven. In the first chapter, I investigate what potential problems may be driving the inconsistent empirical findings in the literature, and I provide an identification strategy that can circumvent those problems. Using a disaggregate industry-level foreign direct investment and trade data from South Korea, the carefully designed empirical model finds that polluting firms are more attracted to a country with lax environmental regulations relative to non-polluting firms. The results contribute to the literature by providing strong evidence for the PHH as well as stressing what one needs to care about in order to identify the pollution haven effect.;Another feature of globalization is that classical trade barriers such as import tariffs and quotas continue to collapse. Countries who want to protect their domestic industries from foreign competitors are now more practicing discriminatory and temporary trade remedy instruments. This trend is well epitomized in the China-specific safeguard case on tires activated by the U.S. in 2009. In the second chapter, Joonhyung Lee, Thomas Osang, and I evaluate how the tire safeguard case affected workers in the U.S. tire industry. The evaluation is particularly interesting, because the case has been a platform talking point of both candidates in the current U.S. presidential election. Contrary to the claim made by Obama administration, we find that total employment and wages in the tire industry show no different time trends from the ones in a hypothetical control industry, technically known as a ``synthetic control" that is optimally constructed to mimic the tire industry prior to 2009. We argue that one potential reason for no effect is due to the complete diversion of tire imports from China to other exporters.