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Local Learning, Trade Policy and Industrial Structure Dynamics

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Author Info
Facundo Albornoz and Paolo Vanin

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Abstract

In a small open economy with heterogeneous firms, in which tariffs determine the mass of active firms, free trade optimality depends positively on the level of firm heterogeneity and negatively on transportation costs. The benefits from temporary protection depend on the level of backwardness: for a given mass of backward firms, the relative gains from protection increase with their quality and decrease with the quality of advanced firms; for given production quality levels, the relative advantage of protection increases with the mass of backward firms.

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File URL: ftp://ftp.bham.ac.uk/pub/RePEc/pdf/AV05_WP.pdf
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Publisher Info
Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 05-12.

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Length: 53 pages
Date of creation: Sep 2005
Date of revision:
Handle: RePEc:bir:birmec:05-12

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Postal: Edgbaston, Birmingham, B15 2TT
Web page: http://www.economics.bham.ac.uk
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Related research
Keywords: Production network Learning externalities Infant industry

Find related papers by JEL classification:
D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
D62 - Microeconomics - - Welfare Economics - - - Externalities
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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