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How Barriers to International Trade Affect TFP

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Author Info

  • Berthold Herrendorf

    (Arizona State University)

  • Arilton Teixeira

    (Fundacao Capixaba de Pesquisa)

Abstract

We ask how barriers to international trade affect TFP when there are monopoly rights in the import--competing industries. Holmes and Schmitz (1995) show that without barriers to trade TFP in these industries is as large as possible. We study the general case of finite barriers to trade. We find that binding quotas lead to the use of inefficient technology in the import--competing industries. In addition, finite quotas or tariffs imply that the import--competing industries produce larger than efficient quantities, if they produce at all. For both of these reasons, barriers to international trade reduce TFP. (Copyright: Elsevier)

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Bibliographic Info

Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 8 (2005)
Issue (Month): 4 (October)
Pages: 866-876

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Handle: RePEc:red:issued:v:8:y:2005:i:4:p:866-876

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Keywords: TFP; Monopoly Rights; Quota; Tariff;

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References

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Citations

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Cited by:
  1. Tasso Adamopoulos, 2008. "Land Inequality and the Transition to Modern Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 257-282, April.
  2. Riccardo DiCecio & Levon Barseghayn, 2009. "Entry Costs, Misallocation, and Cross-Country Income and TFP Differences," 2009 Meeting Papers, Society for Economic Dynamics 428, Society for Economic Dynamics.
  3. Lei Fang, 2009. "Entry barriers, competition, and technology adoption," Working Paper, Federal Reserve Bank of Atlanta 2009-08, Federal Reserve Bank of Atlanta.
  4. Igor D. Livshits & James C. MacGee, 2008. "Barriers to Technology Adoption and Entry," University of Western Ontario, Economic Policy Research Institute Working Papers, University of Western Ontario, Economic Policy Research Institute 20087, University of Western Ontario, Economic Policy Research Institute.
  5. Desmet, Klaus & Parente, Stephen, 2006. "Bigger is Better: Market Size, Demand Elasticity and Resistance to Technology Adoption," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5825, C.E.P.R. Discussion Papers.
  6. Butter, Frank A.G. den & Wit, Paul, 2006. "Trade and product innovations as sources for productivity increases: an empirical analysis," Serie Research Memoranda, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics 0013, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  7. Alessio Moro, 2007. "Biased Technical Change, Intermediate Goods and Total Factor Productivity," Economics Working Papers we076034, Universidad Carlos III, Departamento de Economía, revised Jun 2008.
  8. Bridgman, Benjamin R. & Livshits, Igor D. & MacGee, James C., 2007. "Vested interests and technology adoption," Journal of Monetary Economics, Elsevier, Elsevier, vol. 54(3), pages 649-666, April.
  9. Frank Butter & Jan Möhlmann & Paul Wit, 2008. "Trade and product innovations as sources for productivity increases: an empirical analysis," Journal of Productivity Analysis, Springer, Springer, vol. 30(3), pages 201-211, December.
  10. Riccardo DiCecio & Levon Barseghyan, 2010. "Entry Costs, Industry Structure, and Cross-Country Income and TFP Differences," 2010 Meeting Papers, Society for Economic Dynamics 964, Society for Economic Dynamics.
  11. Arilton Teixeira & Mirta N. S. Bugarin & Roberto Ellery Jr. & Victor Gomes, 2009. "From a Miracle to a Disaster: the Brazilian Economy in the 3 last Decades," Fucape Working Papers, Fucape Business School 20, Fucape Business School.
  12. Pedro Cavalcanti Ferreira & Joao victor Issler & Samuel de Abreu Pessoa, 2005. "An investigation of cross-country incme differences," Revista de Analisis Economico – Economic Analysis Review, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines, vol. 20(2), pages 3-22, December.

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