Topic: International Trade and Social Connectedness
Speaker: Johannes Stroebel, David S. Loeb Professor of Finance, New York University Leonard N. Stern School of Business
Date: December 9, 2020 (Wednesday)
Time: 10:00-11:30
Location: 4-101
Language: English
Abstract:
We use anonymized data from Facebook to construct a new measure of the pairwise social connectedness between 180 countries and 332 European regions. We find that two countries trade more with each other when they are more socially connected and when they share social connections with a similar set of other countries. The social connections that determine trade in each product are those between the regions where the product is produced in the exporting country and those where it is used in the importing country. Once we control for social connectedness, the estimated effect of geographic distance on trade declines substantially, and the effect of country borders disappears. Our findings suggest that social connectedness increases trade by reducing information asymmetries and by providing a substitute for both trust and formal mechanisms of contract enforcement. We also present evidence against omitted variables and reverse causality as alternative explanations for the observed relationships between social connectedness and trade flows.
About the speaker:
Johannes Stroebel is the David S. Loeb Professor of Finance and the Boxer Faculty Fellow at the New York University Stern School of Business. He joined NYU in 2013 from the University of Chicago Booth School of Business, where he was the Neubauer Family Assistant Professor of Economics.
Professor Stroebel conducts research in finance, macroeconomics, real estate economics, and climate finance. He has won numerous awards, including the AQR Asset Management Institute Young Researcher Prize and the Brattle Award for the best paper published in the Journal of Finance. He has also won an Alfred P. Sloan Research Fellowship in Economics. Professor Stroebel is an Associate Editor at the Journal of Political Economy, the Review of Economic Studies, Econometrica, and the Journal of Finance.
Professor Stroebel read Philosophy, Politics, and Economics at Merton College, Oxford, where he won the Hicks and Webb Medley Prize for the best performance in Economics. He earned a Ph.D. in Economics at Stanford University, where he held the Bradley and Kohlhagen Fellowships at the Stanford Institute for Economic Policy Research.
