Franco Riottini Depetris

Franco Riottini Depetris

Master in Economics (UdeSA - UNL)

Publications

Automatic Product Classification in International Trade: Machine Learning and Large Language Models

IDB Working Papers (Revise and Resubmit at Review of International Economics), 2024

Accurate product classification is crucial in international trade. In this study, we apply and assess several algorithms to automatically classify agricultural and food products based on text descriptions sourced from different public agencies, including customs authorities and the United States Department of Agriculture (USDA). We find that while traditional machine learning (ML) models tend to perform well within the dataset in which they are trained on, their precision drops dramatically when applied to external datasets. In contrast, large language models (LLMs) show a consistently strong performance across all datasets. The top performing LLMs —Claude 3.5 Sonnet and GPT 4— achieve accuracy rates of approximately 80% at classifying products into 6-digit Harmonized System (HS) categories and above 90% for HS 2-digit Chapters. Our analysis highlights the valuable role that artificial intelligence can play in facilitating product classification at scale and, more generally, in enhancing the categorization of unstructured data.

Recommended citation: Marra de Artiñano, I., Riottini Depetris, F., & Volpe Martincus, C. (2024). "Automatic Product Classification in International Trade: Machine Learning and Large Language Models." (No. 12962). Inter-American Development Bank.

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Do Ambassadors Matter? The effect of ambassadors on trade promotion

Universidad de San Andrés, 2024

This paper examines the impact of ambassadors on trade promotion, utilizing the 2012 Paraguayan political crisis as a natural experiment. Using highly disaggregated customs data and a difference-in-differences approach, I analyse how the unexpected withdrawal of Argentina’s ambassador affected bilateral trade patterns. My findings reveal that the ambassador’s absence led to a significant decrease in Paraguay’s imports from Argentina, primarily driven by reductions in the extensive margin of trade. I observed a 3% decline in the number of suppliers and a 5% decrease in the number of imported products. To elucidate the mechanisms, I analyse data on commercial and specific actions undertaken by the Argentine embassy in Paraguay. Results indicate that the ambassador’s absence corresponded with a substantial decrease in both major trade events and smaller, targeted activities, despite no change in the embassy’s budget allocation. The analysis is robust to various specifications, including different regional samples and trade volume thresholds. This research contributes to the literature on economic diplomacy by providing causal evidence of ambassadors’ role in facilitating international trade, particularly in establishing new trade relationships.

Recommended citation: Riottini Depetris, Franco (2024). 'Do Ambassadors Matter? The effect of ambassadors on trade promotion.' Master Thesis at Universidad de San Andrés.

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Work in Progress

The Value of Organic Certifications

Work in Progress Article joint with I. Marra de Artiñano, G. Scattolo, C. Volpe Martincus and L. Zavala

Consumer taste for organic products has grown, increasing demand and costs along agricultural value chains. We estimate the impact of the world’s largest certification system – USDA organic – on exporters from one of the world’s most important organic production regions – Latin America. For that purpose, we use a novel dataset which combines the universe of agricultural export transactions from 10 countries in Latin America with the universe of organic certifications granted by the US Department of Agriculture since 2012. Our results indicate that certified firms increase exports to the USA relative to non-certified firms. Spillover effects are positive within firms, as certified firms increase exports of certified products to other destinations and non-certified products to the USA. Spillover effects are negative across firms: the more firms are already certified in the USA, the less that exports increase following certification.

IDB Blog Post on early version