Market Entry Costs, Underemployment and International Trade
AbstractWe develop a small, open economy, two-sector model with heterogeneous agents and endogenous participation in a labor matching market. We analyze the implications of asymmetric market entry costs for the patterns of international trade and underemployment. Furthermore, we examine the welfare implications of trade liberalization and find that under certain conditions the patterns of trade are not optimal. We also examine the robustness of our results when we allow for complementarities in the production function and for alternative matching mechanisms.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3263.
Date of creation: 2010
Date of revision:
entry costs; patterns of trade; underemployment;
Other versions of this item:
- Spiros Bougheas & Raymond Riezman, . "Market Entry Costs, Underemployment and International Trade," Discussion Papers 10/18, University of Nottingham, GEP.
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
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