IDEAS home Printed from https://ideas.repec.org/p/red/sed007/914.html
   My bibliography  Save this paper

Export Subsidies, Productivity and Welfare under Firm-Level Heterogeneity

Author

Listed:
  • Andres Rodriguez-Clare

    (University of Georgia)

  • Svetlana Demidova

    (Pennsylvania State University and NBER)

Abstract

In this paper we use the monopolistic competition model with heterogeneous firms to study the effect of different policies on productivity and welfare, and provide three particular policies, which allow to reach the first best allocation in the economy. We also show that an export subsidy generates an increase in productivity, but - if policy already deals with the mark-up distortion that arises in this context (for example, through a subsidy on consumption of domestic varieties) - its effect on welfare is negative due to combination of falling variety and adverse terms of trade changes.

Suggested Citation

  • Andres Rodriguez-Clare & Svetlana Demidova, 2007. "Export Subsidies, Productivity and Welfare under Firm-Level Heterogeneity," 2007 Meeting Papers 914, Society for Economic Dynamics.
    • Handle: RePEc:red:sed007:914
    as

    Download full text from publisher

    File URL: https://red-files-public.s3.amazonaws.com/meetpapers/2007/paper_914.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 903-947.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chor, Davin, 2009. "Subsidies for FDI: Implications from a model with heterogeneous firms," Journal of International Economics, Elsevier, vol. 78(1), pages 113-125, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elhanan Helpman, 2010. "Labor Market Frictions as a Source of Comparative Advantage, with Implications for Unemployment and Inequality," NBER Working Papers 15764, National Bureau of Economic Research, Inc.
    2. repec:ilo:ilowps:366690 is not listed on IDEAS
    3. Rodríguez-Pose, Andrés & Tselios, Vassilis & Winkler, Deborah & Farole, Thomas, 2013. "Geography and the Determinants of Firm Exports in Indonesia," World Development, Elsevier, vol. 44(C), pages 225-240.
    4. Alexander Hijzen & Sébastien Jean & Thierry Mayer, 2011. "The effects at home of initiating production abroad: evidence from matched French firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(3), pages 457-483, September.
    5. Xiaoyu Zhou & Yi Han & Rui Wang, 2013. "An Empirical Investigation on Firms’ Proactive and Passive Motivation for Bribery in China," Journal of Business Ethics, Springer, vol. 118(3), pages 461-472, December.
    6. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2003. "Plants and Productivity in International Trade," American Economic Review, American Economic Association, vol. 93(4), pages 1268-1290, September.
    7. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2018. "Global Firms," Journal of Economic Literature, American Economic Association, vol. 56(2), pages 565-619, June.
    8. Francesco Amodio & Nicolás de Roux, 2021. "Labor Market Power in Developing Countries: Evidence from Colombian Plants," Documentos CEDE 19267, Universidad de los Andes, Facultad de Economía, CEDE.
    9. Li, Linjie & Liu, Xiaming & Yuan, Dong & Yu, Miaojie, 2017. "Does outward FDI generate higher productivity for emerging economy MNEs? – Micro-level evidence from Chinese manufacturing firms," International Business Review, Elsevier, vol. 26(5), pages 839-854.
    10. Richard Harris & John Moffat, 2011. "R&D, Innovation and Exporting," SERC Discussion Papers 0073, Centre for Economic Performance, LSE.
    11. Jan De Loecker & Jozef Konings, 2003. "Creative Destruction and Productivity Growth in an Emerging Economy Evidence from Slovenian Manufacturing," LICOS Discussion Papers 13803, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    12. Yoshino, Yutaka, 2008. "Domestic constraints, firm characteristics, and geographical diversification of firm-level manufacturing exports in Africa," Policy Research Working Paper Series 4575, The World Bank.
    13. Tavassoli, Sam, 2015. "Innovation determinants over industry life cycle," Technological Forecasting and Social Change, Elsevier, vol. 91(C), pages 18-32.
    14. Sébastien Jean, 2002. "International Trade and Firms' Heterogeneity under Monopolistic Competition," Open Economies Review, Springer, vol. 13(3), pages 291-311, July.
    15. Martin Andersson & Hans Lööf, 2009. "Learning‐by‐Exporting Revisited: The Role of Intensity and Persistence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 893-916, December.
    16. Amit Gandhi & Salvador Navarro & David Rivers, 2011. "On the Identification of Production Functions: How Heterogeneous is Productivity?," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20119, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    17. Ben Jelili, Riadh & Goaied, Mohamed, 2009. "Entry, Exit, and Productivity in Tunisian Manufacturing Industries," MPRA Paper 52222, University Library of Munich, Germany, revised 2008.
    18. SHIMAMOTO Daichi & Yu Ri KIM & TODO Yasuyuki, 2019. "The Effect of Social Interactions on Exporting Activities: Evidence from Micro, Small, and Medium-Sized Enterprises in rural Vietnam," Discussion papers 19020, Research Institute of Economy, Trade and Industry (RIETI).
    19. Aslan, Hadiye & Kumar, Praveen, 2016. "The product market effects of hedge fund activism," Journal of Financial Economics, Elsevier, vol. 119(1), pages 226-248.
    20. Francesco Serti & Chiara Tomasi, 2008. "Self-Selection and Post-Entry Effects of Exports: Evidence from Italian Manufacturing Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 660-694, December.
    21. Braunerhjelm, Pontus & Halldin, Torbjörn, 2019. "Born globals – presence, performance and prospects," International Business Review, Elsevier, vol. 28(1), pages 60-73.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed007:914. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: https://edirc.repec.org/data/sedddea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.