Freund, Caroline

Macroeconomics Trade & Investment
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Last updated January 31, 2023
Caroline Freund is Director of Trade, Regional Integration and Investment Climate. Previously she was a Senior Fellow at the Peterson Institute for International Economics.  She has also worked as Chief Economist for the Middle East and North Africa at the World Bank, after working for nearly a decade in the international trade unit of the research department.  Freund began her career in the international finance division of the Federal Reserve Board and spent a year visiting the research department of the IMF.  She has published extensively in academic journals and is the author of Rich People Poor Countries: The Rise of Emerging Market Tycoons and their Mega Firms.  She is a US national and received a PhD in economics from Columbia University.
Citations 232 Scopus

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Now showing 1 - 3 of 3
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    The Origins and Dynamics of Export Superstars
    (Published by Oxford University Press on behalf of the World Bank, 2020-02) Freund, Caroline ; Pierola, Martha Denisse
    Export superstars are important for export growth and diversification and are typically born large. Firm-level data on manufacturing trade from 32 developing countries show that the top five exporters account for on average nearly one-third of exports, 47 percent of export growth, and a third of the growth due to export diversification over a five-year period. Within countries and industries, export growth is positively correlated with the share of exports in the top five firms. Most of the top five exporters were already large five (or eight) years ago or are new firms; it is rare for these export superstars to emerge from the bottom half of the distribution of firm sizes. For countries where detailed data exist, superstars are producers, not traders, and are primarily foreign owned.
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    Natural Disasters and the Reshaping of Global Value Chains
    (World Bank, Washington, DC, 2021-06) Freund, Caroline ; Mattoo, Aaditya ; Mulabdic, Alen ; Ruta, Michele ; Mattoo, Aaditya
    To understand the longer term consequences of natural disasters for global value chains, this paper examines trade in the automobile and electronic sectors after the 2011 earthquake in Japan. Contrary to widespread expectations, the analysis shows that the shock did not lead to reshoring, nearshoring, or diversification; and trade in intermediate products was disrupted less than trade in final goods. Imports did shift to new suppliers, especially where dependence on Japan was greater. But production relocated to developing countries rather than to other top exporters. Despite important differences, the observed pattern of switching may be relevant to disasters like the COVID-19 pandemic.
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    When Elephants Make Peace: The Impact of the China-U.S. Trade Agreement on Developing Countries
    (World Bank, Washington, DC, 2020-03) Freund, Caroline ; Maliszewska, Maryla ; Mattoo, Aaditya ; Ruta, Michele ; Mattoo, Aaditya
    Should the China-U.S. trade agreement prompt relief because it averts a damaging trade war or concern because selective preferential access for the United States to China's markets breaks multilateral rules against discrimination? The answer depends on how China implements the agreement. Simulations from a computable general equilibrium model suggest that the United States and China would be better off under this "managed trade" agreement than if the trade war had escalated. However, compared with the policy status quo, the deal will make everyone worse off except the United States and its input-supplying neighbor, Mexico. Real incomes in the rest of world would decline by 0.16 percent and in China by 0.38 percent because of trade diversion. China can reverse those losses if, instead of granting the United States privileged entry, it opens its market for all trading partners. Global income would be 0.6 percent higher than under the managed trade scenario, and China's income would be nearly 0.5 percent higher. By creating a stronger incentive for China to open its markets to all, an exercise in bilateral mercantilism has the potential to become an instrument for multilateral liberalization.