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Trade Liberalization and Growth: Plant-Level Evidence from Switzerland

  • Bühler, Stefan

    ()

  • Helm, Marco

    ()

  • Lechner, Michael

    ()

This paper estimates the effect of trade liberalization on growth, using plant-level data from Switzerland. We employ a natural experiment framework to quantify the effect of a bundle of treaties liberalizing trade between Switzerland and the EU enacted in June 2002 ("Bilateral Agreements I") on the growth of Swiss plants. Using both a semi-parametric difference-indifferences and a matching approach, we find that the liberalization of trade increased the growth of affected plants by 1-2 percent during the first six years after liberalization. Our results suggest that trade liberalization has a relevant effect on growth.

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File URL: http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1133.pdf
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Paper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1133.

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Length: 36 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:usg:econwp:2011:33
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  1. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
  2. Jonathan Eaton & Samuel Kortum, 2004. "An Anatomy of International Trade: Evidence from French Firms," 2004 Meeting Papers 802, Society for Economic Dynamics.
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  9. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S20-43, July.
  10. Wacziarg, Romain & Welch, Karen Horn, 2003. "Trade Liberalization and Growth: New Evidence," Research Papers 1826, Stanford University, Graduate School of Business.
  11. Mattoo, Aaditya & Rathindran, Randeep, 2006. "Measuring Services Trade Liberalization and Its Impact on Economic Growth: An Illustration," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 64-98.
  12. Richard Blundell & Monica Costa Dias, 2008. "Alternative approaches to evaluation in empirical microeconomics," CeMMAP working papers CWP26/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  13. Andrew B Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2000. "Plants and productivity in international trade," Working Papers 00-08, Center for Economic Studies, U.S. Census Bureau.
  14. Stephen Redding, 2010. "Theories of Heterogeneous Firms and Trade," CEP Discussion Papers dp0994, Centre for Economic Performance, LSE.
  15. Martin Huber & Michael Lechner & Conny Wunsch, 2010. "How to control for many covariates? Reliable estimators based on the propensity score," University of St. Gallen Department of Economics working paper series 2010 2010-30, Department of Economics, University of St. Gallen.
  16. Bruce D. Meyer, 1994. "Natural and Quasi- Experiments in Economics," NBER Technical Working Papers 0170, National Bureau of Economic Research, Inc.
  17. Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 287-331, June.
  18. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  19. L Alan Winters, 2004. "Trade Liberalisation and Economic Performance: An Overview," Economic Journal, Royal Economic Society, vol. 114(493), pages F4-F21, 02.
  20. Ederington, Josh & McCalman, Phillip, 2008. "Endogenous firm heterogeneity and the dynamics of trade liberalization," Journal of International Economics, Elsevier, vol. 74(2), pages 422-440, March.
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