*************************************************************************
*University of British Columbia
*Sauder School of Business  
*Vanessa Alviarez
*Multinationals and Comparative Advantage
*Journal of International Economics
**************************************************************************

*====================================================================
Readme file for "Multinational Production and Comparative Advantage" 
*====================================================================


*---------------------------------------------------------------------
Folders and directory 
*---------------------------------------------------------------------
-Main folder is called "Data and Replication Files"
-This file contains a directory do file called "MP_CA_directory.do". The user should add her/his corresponding directory 

- Subfolders: 
	a) stata_do
	b) stata_dta
	c) matlab_code /*This include both m and mat files*/
	d) figures
	e) tables

- General do files: 
	b) MP_CA_directory.do (This is the main directory. To be change by the user)
	a) sample_countries.do 



*---------------------------------------------------------------------
Section 1: Main Datasets:
*---------------------------------------------------------------------
- MP/Trade dataset: "${MP_CA_data}/mp_dataset_ori_loc_sec.dta"
- Bilateral gravity dataset: "${MP_CA_data}/bilateral_dataset_complete.dta"
- TFP dataset "${MP_CA_data}/productivity_dataset_complete.dta"
- Taxes and Labor/Capital dataset: "${MP_CA_data}/taxes_lk_dataset_complete.dta"
- Notice that there are a number of auxiliar datasets in the dta folder



*---------------------------------------------------------------------
Section 3: Stylized Fact
*---------------------------------------------------------------------
run do section_3_1.do /*This file takes combine the above datasets and prepares a file of observables and export it to Matlab*
run do section_3_2.do /*Creates the Tables and Figures:*/

	*Main Text: 
	Table 1: Relationship Between Bilateral Sectoral MP and Relative Productivity
	Table 2: Relationship Between Bilateral Sectoral MP and Productivity
	Figure 1: Sectoral MP and Productivity

	*Appendix:
	Table A1: Relationship Between Bilateral Sectoral MP and Relative Productivity (OLS)
	Table A2: Relationship Between Bilateral Sectoral MP and Relative Productivity (OLS and PPML, average of the ratio)
	Table A3: Relationship Between Bilateral Sectoral MP and Productivity (country-sector level)
	Table A4: Relationship Between Bilateral Sectoral MP and Productivity (T source and T location, OLS) 
	Table A5: Relationship Between Bilateral Sectoral MP and Productivity (T source and T location, OLS (average of the ratio)) 



*---------------------------------------------------------------------
Section 4: Estimation of productivity parameters 
*---------------------------------------------------------------------
run do section_4_withcapital.do /* Produces T's, g's and d's parameters following Section 4 in the paper (in a model with capital) */
	- It calls run do module_g_interation_m.do (in gravity_mp/poisson or gravity_mp/reg subfolder)
run do section_4_nocapital.do   /* Robutness: Produces T's, g's and d's paramters following Section 4 in the paper (in a model without capital) */
	- It calls run do module_g_interation_m.do 		
run do section_4_2_1.do /*Creates the Tables and Figures:*/

	*Main Text: 
	Table 1: Relative Productivity, by Country and Industry
	Figure 2: Effective and Fundamental Productivities
	Figure 3: Multinational Production and Sectoral Productivity
	Figure 4: Estimated Multinational Production Barriers, glsj

	*Appendix:
	Figure A.5: dj for a Selective Group of Countries



*---------------------------------------------------------------------
Section 5: Counterfactuals
*---------------------------------------------------------------------
1) Main Equilibrium: <<Table 4 in the paper: welfare gains (multi-sector and uni-sector)>>

run section_4_1.m /* Main file that runs the equilibrium. This file should be runned before each counterfactual */
   - run Equilibrium_mp_complete_loop_CES.m  
   - run model_fit.m   <<Table A.6: The Fit of the Baseline Model to the Data>>
   - run trade_mp_share.m 
   - run agg_betas_gammas.m
   - run welfare_analysis.m 
   - run Model_based_formulas.m  
   - run agg_betas_gammas_ossa_fv.m



2) Counterfactual 1 (lower MP barriers): <<Figure 5 in the paper: "Effects of Lower MP barriers g" (Counterfactual_gdiscount_total_adj.eps)>>

run section_4_1.m /* Main file that runs the equilibrium. This file should be runned before each counterfactual */
   - run Equilibrium_mp_complete_loop_CES.m  
   - run trade_mp_share.m 
   - run agg_betas_gammas.m
   - run welfare_analysis.m 
   - run Model_based_formulas.m  
   - run agg_betas_gammas_ossa_fv.m

run Counterfactuals_gd_lower_fv.m 


3) Counterfactual 2 (Eliminating fundamental CA): <<Figure 6 in the paper: "Changes in GT, GMP, and GO, after removing fundamental comparative advantage" (gains_costinot_1.png) and 
Figure A.6: "Atkinson Index in the baseline vs. the counterfactual scenario with no-Ricardian productivity differences" (Atkinson_trade_c1.png)>>

run section_4_1.m /* Main file that runs the equilibrium. This file should be runned before each counterfactual */
   - run Equilibrium_mp_complete_loop_CES.m  
   - run trade_mp_share.m 
   - run agg_betas_gammas.m
   - run welfare_analysis.m 
   - run Model_based_formulas.m  
   - run agg_betas_gammas_ossa_fv.m

run Equilibrium_mp_loop_prices_fv.m
run Equilibrium_mp_loop_Zs_fv.m
run Counterfactuals_Costinot_m_adjusted_fv.m



4) Counterfactual 3 (keeping effective comparative advantage unchanged) <<Figure 7 in the paper: "Effect of sectoral MP on gains from Trade" (Counterfactual_CA_intact.png)>>

run section_4_1.m /* Main file that runs the equilibrium. This file should be runned before each counterfactual */
   - run Equilibrium_mp_complete_loop_CES.m  
   - run trade_mp_share.m 
   - run agg_betas_gammas.m
   - run welfare_analysis.m 
   - run Model_based_formulas.m  
   - run agg_betas_gammas_ossa_fv.m

run Counterfactuals_CAintact_fv.m 


5) Counterfactual 4 (MP prohibitively costly in Non-Tradables): <<Table 6 in the paper: "Welfare Gains and Non-Tradable Sector">>

run section_4_1.m /* Main file that runs the equilibrium. This file should be runned before each counterfactual */
   - run Equilibrium_mp_complete_loop_CES.m  
   - run trade_mp_share.m 
   - run agg_betas_gammas.m
   - run welfare_analysis.m 
   - run Model_based_formulas.m  
   - run agg_betas_gammas_ossa_fv.m

run Counterfactuals_NT_fv.m