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Ricardian trade and the impact of domestic competition on export performance

Author

Listed:
  • Matilde Bombardini
  • Christopher J. Kurz
  • Peter M. Morrow

Abstract

This paper develops and empirically examines a model of relative productivity differences both within and across industries for small open economies. We decompose the effect of industry productivity on export performance into direct effect of own-firm productivity and an indirect effect of higher peer-firm productivity. In a sample of Chilean and Colombian plants, we find evidence of both a positive direct effect and a negative indirect effect. The empirical evidence supports our theoretical prediction that industry-specific factors of production and asymmetric substitutability between domestic and foreign varieties drive the negative indirect effect. JEL classification: F10, F11, F12

Suggested Citation

  • Matilde Bombardini & Christopher J. Kurz & Peter M. Morrow, 2012. "Ricardian trade and the impact of domestic competition on export performance," Canadian Journal of Economics, Canadian Economics Association, vol. 45(2), pages 585-612, May.
  • Handle: RePEc:cje:issued:v:45:y:2012:i:2:p:585-612
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    Citations

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    Cited by:

    1. William R Kerr, 2018. "Heterogeneous Technology Diffusion and Ricardian Trade Patterns," World Bank Economic Review, World Bank Group, vol. 32(1), pages 163-182.
    2. Haichao Fan & Edwin L.-C. Lai & Han Steffan Qi, 2016. "Imported-input Trade Liberalization and Firms' Export Performance in China: Theory and Evidence," CESifo Working Paper Series 5828, CESifo Group Munich.
    3. Ulf Lewrick & Lukas Mohler & Rolf Weder, 2014. "When firms and industries matter: understanding the sources of productivity growth," BIS Working Papers 469, Bank for International Settlements.
    4. Fábio Batista & José Eduardo Matos & Miguel Costa Matos, 2017. "Assessing the Competitiveness of the Portuguese Footwear Sector," GEE Papers 0066, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Feb 2017.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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