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Kalina Manova

University College London

Kalina Manova is Professor of Economics and Deputy Department Head at the University College London, specializing in international trade and investment. She received her AB, AM and PhD from Harvard, and was previously Assistant Professor at Stanford, Visiting Assistant Professor at Princeton, and Professor at Oxford. She serves on the Council of the European Economic Association and on the editorial boards of Review of Economic Studies and previously Journal of International Economics. She is Research Fellow at the Centre for Economic Policy Research, Associate at the LSE Centre for Economic Performance, Research Affiliate at the International Growth Centre, Affiliate at CESifo Institute, and External Consultant at Bank of England. Professor Manova's research explores three themes in international economics: (i) the effects of financial frictions on international trade, multinational activity, and gains from globalization; (ii) the role of firm heterogeneity in productivity, quality, and management; and (iii) the determinants and consequences of global value chains for firm performance. Her research has been published in leading academic journals and policy forums.
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publication
The Origins of Firm Heterogeneity: A Production Network Approach

This paper explores firm size heterogeneity in production networks. Using all buyer-supplier relationships in Belgium, the paper shows that firms with more customers havehigher total sales but lower sales per customer and lower market shares among thosecustomers. A decomposition of firm sales reveals that downstream factors, especiallythe number of customers, explain the large majority of firm size heterogeneity. Thesefacts motivate a model of heterogeneous firms and network formation where firms searchfor and sell to downstream buyers and buy inputs from upstream suppliers. Firms varyin their productivity and relationship capability. Higher productivity results in morematches and larger market shares among customers. Higher relationship capability re-sults in more customers and higher sales. Estimated model parameters suggest thatproductivity and relationship capability are strongly negatively correlated. A counter-factual exercise shows that the real wage gains from improving relationship capabilityare substantial, and much larger in our model compared to canonical models of one-dimensional heterogeneity.

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publication
Growing like China: Firm performance and global production line position

Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992–2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, fixed costs incurred, and profits. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed.

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publication
How firms export: Processing vs. ordinary trade with financial frictions

The fragmentation of production across borders allowsfirms to make and exportfinal goods, or to perform only in-termediate stages of production by processing imported inputs for re-exporting. We examine howfinancial frictionsaffect companies' choice between processing and ordinary trade–implicitly a choice of production technology andposition in global supply chains–and how this decision affects performance. We exploit matched customs and bal-ance sheet data from China, where exports are classified as ordinary trade, import-and-assembly processing trade(processingfirm sources and pays for imported inputs), and pure assembly processing trade (processingfirm re-ceives foreign inputs for free). Value added, profits, and profitability rise from pure assembly to processing with im-ports to ordinary trade. However, more profitable trade regimes require more working capital because they entailhigher up-front costs. As a result, credit constraints inducefirms to conduct more processing trade and pure assem-bly in particular and preclude them from pursuing higher value-added, more profitable activities. Financial marketimperfections thus impact the organization of production acrossfirms and countries and inform optimal trade anddevelopment policy in the presence of global production networks.

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