Trade Liberalization and Firm Dynamics
AbstractIn this paper, we analyze the transition dynamics associated with an economy's response to trade liberalization. We start by reviewing the recent literature that incorporates firm dynamics into models of international trade. We then build upon that literature to characterize the role of firm dynamics, export-market selection, firm-level innovation, sunk export costs, and firms expectations regarding the time path of liberalization in generating those transition dynamics following trade liberalization. These modeling ingredients generate substantial aggregate transition dynamics as they shift and shape the endogenous distribution of firms over time. Our results show how the responses of trade volumes, innovation, and aggregate output can vary greatly over time depending on those modeling ingredients. This has important consequences for many issues in international economics that rely on predictions for the effects of globalization over time on those key aggregate outcomes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16960.
Date of creation: Apr 2011
Date of revision:
Note: IFM ITI
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-23 (All new papers)
- NEP-BEC-2011-04-23 (Business Economics)
- NEP-DGE-2011-04-23 (Dynamic General Equilibrium)
- NEP-INT-2011-04-23 (International Trade)
- NEP-OPM-2011-04-23 (Open Economy Macroeconomic)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonio Navas-Ruiz & Davide Sala, 2007.
"Technology adoption and the selection effect of trade,"
Economics Working Papers
we076737, Universidad Carlos III, Departamento de Economía.
- Antonio Navas-Ruiz & Davide Sala, 2007. "Technology Adoption and the Selection Effect of Trade," Economics Working Papers ECO2007/58, European University Institute.
- Long, Ngo Van & Raff, Horst & Stähler, Frank, 2011.
"Innovation and trade with heterogeneous firms,"
Journal of International Economics,
Elsevier, vol. 84(2), pages 149-159, July.
- Ngo Van Long & Horst Raff & Frank Stähler, 2009. "Innovation and Trade with Heterogeneous Firms," CESifo Working Paper Series 2796, CESifo Group Munich.
- Ngo Van Long & Horst Raff & Frank Stähler, 2008. "Innovation and Trade with Heterogeneous Firms," Kiel Working Papers 1430, Kiel Institute for the World Economy.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Trade Liberalization and Firm Dynamics
by Christian Zimmermann in NEP-DGE blog on 2011-04-26 14:09:20
- Campbell, Douglas L., 2013.
"Relative Prices, Hysteresis, and the Decline of American Manufacturing,"
51723, University Library of Munich, Germany.
- Douglas L. Campbell, 2013. "Relative Prices, Hysteresis, and the Decline of American Manufacturing," 2013 Papers pca584, Job Market Papers.
- Peter Arendorf Bache, 2012. "A Dynamic Model of Trade with Heterogeneous Firms," Economics Working Papers 2012-03, School of Economics and Management, University of Aarhus.
- Schröder, Philipp J.H. & Sørensen, Allan, 2012.
"Firm exit, technological progress and trade,"
European Economic Review,
Elsevier, vol. 56(3), pages 579-591.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.