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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. 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.
    2. William R. Kerr, 2013. "Heterogeneous Technology Diffusion and Ricardian Trade Patterns," NBER Working Papers 19657, National Bureau of Economic Research, Inc.
    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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