Size rationalization and trade exposure in developing countries
Given the lack of direct evidence regarding industrial adjustment in response to trade liberalization, this paper tackles some very basic questions. Specifically, in LDCs, how is trade orientation correlated with the size distribution of plants and with plant-level labor productivity? It begins with a simple model that summarizes some effects of trade exposure on producer size and productive efficiency that have been stressed in the recent analytical and simulation literature. It then examines annual plant-level data from Chile and Colombia to determine whether these effects can be confirmed. The empirical results indicate that, over the long run, higher trade exposure is correlated with smaller plant sizes, controlling for industry and country effects. However, the mix of high versus low productivity plants is not strongly associated with trade exposure. Both of these findings cast doubt on the mechanisms linking trade, plant size, and productivity in a number of recent analytical and simulation studies.
|Date of creation:||28 Feb 1991|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brown, D.K., 1988.
"Tariffs And Capacity Utilization By Monopolistically Competitive Firms,"
229, Research Seminar in International Economics, University of Michigan.
- Brown, Drusilla K., 1991. "Tariffs and capacity utilization by monopolistically competitive firms," Journal of International Economics, Elsevier, vol. 30(3-4), pages 371-381, May.
- Horstmann, Ignatius J. & Markusen, James R., 1986. "Up the average cost curve: Inefficient entry and the new protectionism," Journal of International Economics, Elsevier, vol. 20(3-4), pages 225-247, May.
- Condon, Timothy & de Melo, Jaime, 1990.
"Industrial organization implications of QR trade regimes : evidence and welfare costs,"
Policy Research Working Paper Series
487, The World Bank.
- Condon, Timothy & de Melo, Jaime, 1991. "Industrial Organization Implications of QR Trade Regimes: Evidence and Welfare Costs," Empirical Economics, Springer, vol. 16(1), pages 139-153.
- T. Condon & J. de Melo, 2015. "Industrial Organization Implications of QR Trade Regimes: Evidence and Welfare Costs," World Scientific Book Chapters, in: Modeling Developing Countries' Policies in General Equilibrium, chapter 19, pages 405-419 World Scientific Publishing Co. Pte. Ltd..
- Dani Rodrik, 1988. "Imperfect Competition, Scale Economies, and Trade Policy in Developing Countries," NBER Chapters, in: Trade Policy Issues and Empirical Analysis, pages 109-144 National Bureau of Economic Research, Inc.
- Theodore C. Bergstrom & Hal R. Varian, 1985. "When Are Nash Equilibria Independent of the Distribution of Agents' Characteristics?," Review of Economic Studies, Oxford University Press, vol. 52(4), pages 715-718.
- Corbo, Vittorio, 1985. "Reforms and macroeconomic adjustments in Chile during 1974-1984," World Development, Elsevier, vol. 13(8), pages 893-916, August.
- James R. Markusen & James R. Melvin, 1981. "Trade, Factor Prices, and the Gains from Trade with Increasing Returns to Scale," Canadian Journal of Economics, Canadian Economics Association, vol. 14(3), pages 450-469, August.
- Markusen, James R., 1981. "Trade and the gains from trade with imperfect competition," Journal of International Economics, Elsevier, vol. 11(4), pages 531-551, November.
- Buffie, Edward F. & Spiller, Pablo T., 1986. "Trade liberalization in oligopolistic industries : The quota case," Journal of International Economics, Elsevier, vol. 20(1-2), pages 65-81, February.
- Shantayanan Devarajan & Dani Rodrik, 1989.
"Pro-Competitive Effects of Trade Reform: Results from a CGE Model of Cameroon,"
NBER Working Papers
3176, National Bureau of Economic Research, Inc.
- Devarajan, Shantayanan & Rodrik, Dani, 1991. "Pro-competitive effects of trade reform : Results from a CGE model of Cameroon," European Economic Review, Elsevier, vol. 35(5), pages 1157-1184, July.
- Harris, Richard, 1984.
"Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition,"
American Economic Review,
American Economic Association, vol. 74(5), pages 1016-1032, December.
- Richard Harris, 1983. "Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition," Working Papers 524, Queen's University, Department of Economics.
- de Melo, Jaime, 1988. "Computable general equilibrium models for trade policy analysis in developing countries: A survey," Journal of Policy Modeling, Elsevier, vol. 10(4), pages 469-503.
- Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
- Bhagwati, Jagdish N, 1988. "Export-Promoting Trade Strategy: Issues and Evidence," World Bank Research Observer, World Bank Group, vol. 3(1), pages 27-57, January.
- Devarajan, Shantayanan & Rodrik, Dani, 1989. "Trade Liberalization in Developing Countries: Do Imperfect Competition and Scale Economies Matter?," American Economic Review, American Economic Association, vol. 79(2), pages 283-287, May.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:594. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.