We would like to invite you to participate in Management Engineering (ME) Seminar.

1. When: November 28th (Thursday), 16:00 ~ 17:30
2. Where: Building 9, 7th #9708
3. Speaker: Prof. Clemens Otto (Singapore Management University)
4. Topic: The Downstream Impact of Upstream Tariffs: Evidence from Investment Decisions in Supply Chains
5. Research field: Finance
* Lecture will be delivered in English.

________________________________________ [Abstract]
We study the impact of upstream tariffs on downstream investment in US manufacturing firms. Our estimates imply that a 10% decrease of all manufacturing import tariffs would translate into an increase in downstream investment by about 1% to 2%. We also find that lower upstream tariffs are followed by higher downstream employment, greater output, increased total factor productivity, and a higher return on capital. To address the concern that upstream tariffs may be endogeneous to downstream growth opportunities, we conduct a difference-in-differences analysis that exploits tariff revisions following multinational trade agreements. Extending our analysis beyond import tariffs, we further use the sudden increase in Chinese import penetration in an instrumental variable estimation and show that higher import competition upstream leads to increased investment downstream.