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Barriers to Entry and Development

  • Arilton Teixeira

    ()

    (FUCAPE Business School)

  • Berthold Herrendorf

    ()

We ask whether barriers to entry are a quantitatively important reason for the income gap between developing countries and the U.S. We develop a tractable general equilibrium model that captures the effects of barriers to entry and the other main classes of distortion typically considered in the development literature. We carry our model to the data and ask it to match the main development facts from the Penn World Table. We find that this requires large barriers to entry in developing countries, which account for about half of the income gap between developing countries and the U.S.

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File URL: http://www.fucape.br/_public/workingpapers/22-2009.pdf
File Function: Primeira Versão, 2009
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Paper provided by Fucape Business School in its series Fucape Working Papers with number 22.

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Length: 54
Date of creation: Dec 2009
Date of revision:
Publication status: Published in Fucape Working Papers Dezembro 2010
Handle: RePEc:bbz:fcpwps:22
Contact details of provider: Postal: Fucape Business School Brazilian Business Review Av. Fernando Ferrari, 1358, Boa Vista CEP 29075-505 Vitória-ES
Phone: +55 27 4009-4408
Fax: +55 27 4009-4422
Web page: http://www.fucape.br

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