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Trade integration and within-plant productivity evolution in Chile

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Author Info
Maria Bas
Ivan Ledezma

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Abstract

We study the impact of trade on productivity using Chilean plant-level data (1982-1999). Our contribution is to disentangle the impact of export and import barriers. Firstly, we estimate the production functions to obtain plant TFP. Secondly, we estimate trade barriers (border effects) between Chile and its trading partners at the industry level and over time. Finally, we test the impact of trade barriers by regressing productivity on border effect estimates. A fall in export barriers improves productivity in traded sectors, while the reduction of import barriers might foster productivity in export industries but it hurts firms in import-competing ones.

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Paper provided by PSE (Ecole normale supérieure) in its series PSE Working Papers with number 2007-09.

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Date of creation: Apr 2007
Date of revision: Oct 2008
Handle: RePEc:pse:psecon:2007-09

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  1. Andrew B. Bernard & J. Bradford Jensen & Peter K. Schott, 2003. "Falling Trade Costs, Heterogeneous Firms and Industry Dynamics," CEP Discussion Papers dp0585, Centre for Economic Performance, LSE. [Downloadable!]
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  2. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2000. "Plants and Productivity in International Trade," Boston University - Institute for Economic Development 105, Boston University, Institute for Economic Development. [Downloadable!]
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  3. Lane, Philip R., 1999. "The New Open Economy Macroeconomics: a Survey," CEPR Discussion Papers 2115, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Andrew B Bernard & J Bradford Jensen, 2001. "Who Dies? International Trade, Market Structure, and Industrial Restructuring," Working Papers 01-04, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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  5. Zvi Griliches & Jacques Mairesse, 1995. "Production Functions: The Search for Identification," Harvard Institute of Economic Research Working Papers 1719, Harvard - Institute of Economic Research.
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  6. Carolyn L. Evans, 2003. "The Economic Significance of National Border Effects," American Economic Review, American Economic Association, vol. 93(4), pages 1291-1312, September. [Downloadable!]
  7. Lionel Fontagné & Thierry Mayer & Soledad Zignago, 2005. "Trade in the Triad: how easy is the access to large markets?," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1401-1430, November. [Downloadable!] (restricted)
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  8. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September. [Downloadable!] (restricted)
  9. Pavcnik, Nina, 2002. "Trade Liberalization, Exit, and Productivity Improvement: Evidence from Chilean Plants," Review of Economic Studies, Blackwell Publishing, vol. 69(1), pages 245-76, January.
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  10. Raphael Bergoeing & Andrés Hernando & Andrea Repetto, 2006. "Market Reforms and Efficiency Gains in Chile," Working Papers Central Bank of Chile 372, Central Bank of Chile. [Downloadable!]
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