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Nonlinear Treatment Effects in Shift-Share Designs

Luigi Garzon, Vitor Possebom

arXiv 29 Jul 2025 · Econometrics

arXiv:2507.21915 · PDF · Extracted main text

Abstract

We analyze heterogenous, nonlinear treatment effects in shift-share designs with exogenous shares. We employ a triangular model and correct for treatment endogeneity using a control function. Our tools identify four target parameters. Two of them capture the observable heterogeneity of treatment effects, while one summarizes this heterogeneity in a single measure. The last parameter analyzes counterfactual, policy-relevant treatment assignment mechanisms. We propose flexible parametric estimators for these parameters and apply them to reevaluate the impact of Chinese imports on U.S. manufacturing employment. Our results highlight substantial treatment effect heterogeneity, which is not captured by commonly used shift-share tools.

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26
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Chernozhukov, Victor and Fernández-Val, Iván and Newey, Whitney and… (2020) Semiparametric estimation of structural functions in nonseparable triangular models1.000154100%
2Jinyong Hahn and Guido Kuersteiner and Andres Santos and Wavid Willi… (2024) Overidentification in Shift-Share Designs1.000114100%
3Imbens, Guido W. and Newey, Whitney K (2009) Identification and Estimation of Triangular Simultaneous Equations Models Without Additivity1.000114100%
4Borusyak, Kirill and Hull, Peter and Jaravel, Xavier (2021) Quasi-Experimental Shift-Share Research Designs1.00074100%
5Goldsmith-Pinkham, Paul and Sorkin, Isaac and Swift, Henry (2020) Bartik Instruments: What, When, Why, and How1.00073100%
6Autor, David H. and Dorn, David and Hanson, Gordon H (2013) The China Syndrome: Local Labor Market Effects of Import Competition in the United States0.98017594%
7Blundell, Richard and Powell, James L (2003) Endogeneity in Nonparametric and Semiparametric Regression Models0.92843100%
8Adão, Rodrigo and Kolesár, Michal and Morales, Eduardo (2019) Shift-Share Designs: Theory and Inference0.73732100%
9Fajgelbaum, Pablo D and Goldberg, Pinelopi K and Kennedy, Patrick J… (2019) The Return to Protectionism*0.73732100%
10Altonji, Joseph G. and Matzkin, Rosa L (2005) Cross Section and Panel Data Estimators for Nonseparable Models with Endogenous Regressors0.64422100%

Showing the top 10 of 26 scored citations.