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Barriers To Entry And Development

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  • Berthold Herrendorf
  • Arilton Teixeira

Abstract

We ask whether barriers to entry are a quantitatively important reason for the income gap between developing countries and the U.S. We develop a tractable general equilibrium model that captures the effects of barriers to entry and the other main classes of distortion typically considered in the development literature. We carry our model to the data and ask it to match the main development facts from the Penn World Table. We find that this requires large barriers to entry in developing countries, which account for about half of the income gap between developing countries and the U.S.

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Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 52 (2011)
Issue (Month): 2 (05)
Pages: 573-602

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Handle: RePEc:ier:iecrev:v:52:y:2011:i:2:p:573-602

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References

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Citations

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Cited by:
  1. Xu Yi & Nezih Guner & Gustavo Ventura, 2005. "Macroeconomic Implications of Size Dependent Policies," 2005 Meeting Papers 530, Society for Economic Dynamics.
  2. Benjamin Bridgman, 2011. "Competition, Work Rules and Productivity," 2011 Meeting Papers 289, Society for Economic Dynamics.
  3. Lei Fang, 2009. "Entry barriers, competition, and technology adoption," Working Paper 2009-08, Federal Reserve Bank of Atlanta.
  4. Berthold Herrendorf & Akos Valentinyi, 2005. "Which Sectors Make the Poor Countries so Unproductive?," IEHAS Discussion Papers 0519, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  5. David Lagakos, 2009. "Superstores or mom and pops? Technolgy adoption and productivity differences in retail trade," Staff Report 428, Federal Reserve Bank of Minneapolis.
  6. Simeon Alder, 2009. "In the Wrong Hands: Complementarities, Resource Allocation, and Aggregate TFP," 2009 Meeting Papers 1265, Society for Economic Dynamics.
  7. Lee Ohanian & David Lagakos & Simeon Alder, 2012. "The Decline of the U.S. Rust Belt: A Macroeconomic Analysis," 2012 Meeting Papers 793, Society for Economic Dynamics.
  8. Trevor Tombe, 2014. "The Missing Food Problem," Working Papers 2014-35, Department of Economics, University of Calgary, revised 05 Feb 2014.
  9. Diagne, Youssoupha S, 2013. "Impact of business environment on investment and output of manufacturing firms in Senegal," MPRA Paper 54227, University Library of Munich, Germany.

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