Empirical essays on international trade

This thesis aims to contribute to the empirical trade literature on global value chains from the perspective of an emerging economy: Mexico. This country represents an interesting case study from an international point of view as the country is strongly integrated with developed economies through bilateral trade and FDI. Therefore, this thesis aims to identify different trade mechanisms, such as FDI, trade processing, and technology embedded in imports. First, we investigate the effects of FDI and bilateral trade on business cycle comovements. Our findings confirm that bilateral trade strongly impacts the transmission of business cycles. Moreover, these results also reveal the importance of FDI on business cycle comovements. Second, we examine the relationship between new imported varieties and new exported varieties. Our results show that importing new varieties from a source country constitutes an important determinant for exporting new varieties to that same country. Third, we analyze the impact of new imported intermediate inputs and new imported capital goods on exports of new varieties. Our findings confirm that new imported intermediate inputs strongly impact exports of new varieties. Furthermore, these results also shed light on the importance of new imported capital goods on exports of new varieties.