IESR SEMINAR no.179179

Topic：Uncertainty, Imperfect Information and Learning in the International Market
Speaker：Chang Sun，from Hongkong University
Date：September 26，2019
Time：13:30-15:00
Venue：Room 406，Science Building

Introduction to the speaker：
Chang Sun obtained his bachelor's degree from Tsinghua University, and a Ph.D. in economics from Princeton University. He joined the Faculty of Business and Economics at the University of Hong Kong in 2017. His research concerns the impact of globalization, especially the patterns and consequences of multinational production.

Abstract:
Using a dataset of Japanese multinational firms that contains firm-level sales forecasts, we provide new evidence on imperfect information and learning over the firm's life cycle. We find that firms make non-negligible and positively correlated forecast errors over time. However, they make more precise forecasts and less correlated forecast errors, as they become more experienced. We then build a model with heterogeneous firms that gradually learn about their demand. We quantify the learning and real options channels along the age dimension, through which greater micro-level uncertainty adversely affects resource allocation at the extensive margin and thus depresses productivity.