May 7-8, 2026 · Atlanta
Conference Program
Industrial Policies in a Globalized and Financialized World. Hosted at the Federal Reserve Bank of Atlanta.
Day 1
Thursday, May 7, 2026Session 1 · Industrial Policy: Design and Impacts
12:00 – 1:00 pm
Lunch
1:00 – 1:50 pm
Industrial Policies, Global Imbalances and Technological Hegemony
Discussant: Louphou Coulibaly (University of Wisconsin)
Abstract +We provide a framework that connects industrial policies to global imbalances and technological hegemony, and describe some empirical facts consistent with our model. We study the international spillovers triggered by industrial policies promoting high-tech sectors. Since high-tech goods and services are typically traded internationally, these policies boost the supply of tradable goods. Moreover, industrial policies lead to trade surpluses if the government pursues an unbalanced policy mix, such that domestic demand does not rise as much as supply. These surpluses are absorbed by the rest of the world, which in response runs trade deficits. Absent policy interventions, trade deficits reduce the competitiveness of the domestic tradable sector, stifling innovation and productivity growth. Innovation policies can help the rest of the world to mitigate these negative spillovers.
1:50 – 2:10 pm
Break
2:10 – 3:00 pm
Industrial Policy in the Global Semiconductor Sector
Discussant: David Chor (Dartmouth, Tuck)
Abstract +The resurgence of subsidies and industrial policies has raised concerns about their potential inefficiency and alignment with multilateral principles. Critics warn that such policies may divert resources to less efficient firms and provoke retaliatory measures from other countries, leading to a wasteful “subsidy race.” However, subsidies for sectors with inherent cross-border externalities can have positive global effects. This paper examines these issues within the semiconductor industry: a key driver of economic growth and innovation with potentially significant learning-by-doing and strategic importance due to its dual-use applications. The paper documents and quantifies recent industrial policies in the global semiconductor sector, explores the rationale behind these policies, and evaluates their economic impacts, particularly their cross-border effects, and compatibility with multilateral principles. Government support has been vital for the industry’s growth, with subsidies being the primary form of support. Model estimates suggest the presence of learning-by-doing at the firm-product level as well as economies of scope within a firm and substantial cross-border learning spillovers.
3:00 – 3:20 pm
Break
3:20 – 4:10 pm
Industrial Policies for Multi-Stage Production: The Battle for Battery-Powered Vehicles
Discussant: Kerem Coşar (University of Virginia)
Abstract +We model a multi-stage supply chain for EVs from battery production to vehicle distribution. Given industrial policies, firms select where to open facilities at each stage. This is a difficult combinatorial choice problem that we solve with a fast mixed integer linear programming formulation. We estimate the variable and fixed costs parameters using SMM. Counterfactual simulations reveal a tension between boosting EV adoption and promoting domestic supply chains. Due to increasing returns, even unconditional subsidies raise the number of factories in the subsidizing region. Theoretically, local assembly requirements can push down delivered marginal costs relative to unconditional subsidies. Empirically, local content requirements quadruple the expansion of cell factories in America, but they drive up costs and reduce subsidy uptake, undoing more than half of the EV adoption stimulus coming from pure buyer subsidies.
4:10 – 4:30 pm
Break
4:30 – 5:20 pm
Export Subsidies as Industrial Policy: the Case of the 19th Century Sugar Industry
Discussant: Andrew Greenland (NC State University)
Abstract +Can export subsidies spur technological upgrading? What are their welfare implications? We build a model in which firms select into exporting and can pay to upgrade technology. An export subsidy can induce upgrading by increasing exporters’ scale, making upgrading worthwhile. Despite this, we show that an export subsidy is not generally welfare-improving. Absent spillovers, adoption is efficient. With spillovers, the welfare effect comprises: (i) a positive term from moving the adopter share toward the social optimum, and (ii) an allocative term whose sign depends on whether the subsidy alleviates or aggravates pre-existing misallocation. We test the model using a natural experiment in the nineteenth-century Austro-Hungarian beet-sugar industry: an 1864 consumption-tax reform unintentionally created a 12% export subsidy as the industry transitioned to new sugar-extraction technology. Newly digitized factory-level data show that the subsidy reallocated production toward high-export-access regions, whose factories adopted frontier technology earlier.
5:20 – 7:30 pm
Conference Dinner
Day 2
Friday, May 8, 2026Session 2 · Trade Finance and Credit Constraints
8:30 – 9:15 am
Breakfast
9:15 – 10:05 am
Credit Airlines: Financing, Modes of Export, and Comparative Advantage
Discussant: Felipe Benguria (University of Kentucky)
Abstract +We investigate how access to finance and infrastructure jointly shape comparative advantage. We link Colombian banks, firms, exports, and payments data and document three facts. First, most exported goods are shipped by air and sea; second, firms receive payments faster when they ship by air than by sea; third, firms with better access to finance are less likely to ship by air. We build a trade model where firms finance their production while facing sectoral interest rates, heterogeneous delivery lags, and iceberg trade costs by sector and mode, generating tradeoffs among exporters between interest rate payments and shipping costs. A reduction in the interest rate effectively reduces the price of shipping by sea, thus shifting national comparative advantage towards sea-intensive sectors.
10:05 – 10:25 am
Break
10:25 – 11:15 am
Payment Terms and Heterogeneous Shock Transmission in Production Networks
Discussant: Ryan Monarch (Syracuse University)
Abstract +When a supplier is hit by a cost shock, it does not pass the shock uniformly to its buyers: it protects high-trade-credit relationships on the quantity margin, while prices adjust symmetrically across buyer types. Using universe-level Chilean firm-to-firm data (2022-2025), I document that a one-standard-deviation cost shock, a routine annual fluctuation of about 2%, reduces quantities on cash links by 3.3%, while quantities on high-trade-credit links are essentially unchanged; the average price differential across buyer types is near zero. The effect is approximately three times larger for suppliers with greater market power, those with the most valuable relationships to protect. A relational-contracting model rationalizes these patterns. A sufficient-statistics exercise shows that a uniform-transmission model understates the upstream quantity volatility of cash buyers by a factor of 2.4, concentrating the mismeasurement on the youngest and smallest firms.
11:15 – 11:35 am
Break
11:35 am – 12:25 pm
Exporting and Investment under Credit Constraints
Discussant: Leslie Shen (Federal Reserve Bank of Boston)
Abstract +We examine the relationship between firms’ performance and credit constraints affecting export market entry. The existing research assumes that variation in firms’ financial conditions identifies credit constraints. A critical assumption is that financial conditions do not affect real outcomes (performance, exporting, or investment). To relax this assumption, we focus on the direct effect of firms’ fundamentals and financial conditions on firms’ performance. This approach distinguishes between firms that choose not to export because it is unprofitable from firms that do not export because of binding credit constraints. Using administrative Canadian firm-level data, our findings show that new exporters (a) increase their productivity, (b) raise their leverage ratio and (c) increase investment. We estimate that 48 percent of Canadian manufacturers face binding credit constraints when deciding whether to enter export markets.
12:25 – 1:25 pm
Lunch
Session 3 · Trade Policy and Development
1:25 – 2:15 pm
Strategic Avoidance and the Welfare Impacts of U.S. Solar Panel Tariffs
Discussant: Audrey Tiew (New York University)
Abstract +This study examines the effects of tariffs imposed by the U.S. on imported solar panels. We first provide clear evidence that tariff-exposed firms shifted production to locations that did not face tariffs, and that domestic prices increased relative to other markets. We then develop a structural model to analyze welfare effects. We find that the tariffs generated modest gains for domestic manufacturers and for government revenues, but larger losses in domestic consumer surplus and environmental benefits, thereby reducing domestic welfare. Furthermore, the tariffs reduced domestic solar industry employment and wages. By contrast, subsidizing solar panel manufacturing could increase domestic production, employment, and welfare.
2:15 – 2:35 pm
Break
2:35 – 3:25 pm
Geopolitics and Export Miracles: Firm-Level Evidence from U.S. War Procurement in Korea
Discussant: Ming Li (Chinese University of Hong Kong, Shenzhen)
Abstract +How did geopolitics shape East Asia’s economic development? We show that U.S. war procurement during the Vietnam War, a fiscal shock which peaked at 2.9 percent of South Korea’s GDP, rivaling the Marshall Plan, catalyzed Korea’s export-led industrialization. We construct a new firm-level dataset linking Korean export records with U.S. procurement contracts (1966-1974) to estimate the causal impact of winning a contract on export performance. Winning an initial contract increases a firm’s likelihood of exporting by 46 percentage points and triples its export value. These effects extend beyond sales to the United States: treated firms also expanded into third-country markets. The policy had lasting effects. We find that firms treated in the 1960s responded more strongly to South Korea’s heavy and chemical industry drive of the 1970s, indicating that U.S. procurement and domestic industrial policy were complementary.