Mushegh Tovmasyan Defends his PhD in Economics

Composition of the jury:

• Isabelle Méjean, Full Professor, Sciences Po – Examiner
• Giordano Mion, Full Professor, ESSEC Business School – Reviewer
• Meredith Crowley, Full Professor, Cambridge University (UK) – Examiner
• Matthieu Crozet, Full Professor, Université Paris-Saclay – President
• Chahir ZAKI, Junior Professor Chair, Université d’Orléans – Reviewer

PhD Thesis Abstract: Several decades of globalization integrated markets for goods and inputs across the world. Over the past decade, rising geopolitical tension has fragmented international trade. A large literature documents how both processes affect firms and workers at the micro level. This thesis studies who wins and who loses from globalization and fragmentation, and what determines which side a firm or a worker ends up on.

The central chapter studies fragmentation in its sharpest form: sanctions. While the fragmentation of trade is now widely studied, the effect of sanctions on neutral, non-sanctioning economies remains little studied and poorly understood. The chapter examines Armenia after the 2022 escalation of Western sanctions on Russia, its largest trading partner, using customs transactions matched to firm and employer-employee records. Armenia’s exports more than tripled between 2021 and 2024, but the expansion was concentrated: it came from sanctioned products and the largest exporters, while the number of exporters fell. Within existing trade lines, sanctioned exports to Russia grew no faster than other exports; the expansion came from new trade lines and from resale. The number of firms importing from sanctioning countries doubled, and same-firm intermediation, the export of goods a firm had itself imported, rose in sanctioned products, spread from a handful of firms to many, and turned toward Russia. The gains followed pre-war positions: firms that already intermediated toward Russia before the war grew in employment, and their workers were more likely to stay with the same employer and earned more.

The thesis then turns to the decades of globalization that preceded this fragmentation, marked by a proliferation of trade agreements. A long-standing debate holds that manufacturing is special because it allows developing economies to close the productivity gap with advanced economies; if so, trade liberalization could drive that convergence through industrialization. Using the enactment of regional trade agreements in 51 economies between 1990 and 2018 and a two-stage least squares strategy based on the institutional timing of enactments, a second chapter shows that agreements raised the manufacturing share of value added and output per worker, but not manufacturing employment. Liberalization promoted jobless industrialization, most strongly for agreements enacted after 2008 and for those with more legally enforceable provisions.

At the level of workers, a long-standing literature studies workers hit by trade shocks. Migration should be their way out: workers in places specialized in the hardest-hit sectors could move to less exposed labor markets. Yet this literature finds little migration in response to such shocks. One explanation is that moving also changes which occupations a worker can reach; mistaking occupational frictions for geographic ones overstates the cost of moving. The third chapter studies what it is about occupations that shapes the migration response to job loss, using mass layoffs in France between 2003 and 2019. It shows that displaced workers move toward regions with a similar occupational structure, and that migration declines with occupational distance even after controlling for physical distance. Occupational routineness shapes adjustment: workers from routine-intensive occupations move less and switch occupations more, non-routine workers suffer larger proportional wage losses, and the wage penalty from migration is smaller for routine workers. Geographic immobility is therefore partly an occupational friction.