The Impact of Trade Liberalization on Industrial Productivity

Paul Segerstrom () and Yoichi Sugita

No 4365, CESifo Working Paper Series from CESifo

Abstract: This paper calls into question the currently most influential model of international trade. An empirical finding by Trefler (2004, AER) and others that industrial productivity increases more strongly in liberalized industries than in non-liberalized industries has been widely accepted as evidence for the Melitz (2003, Econometrica) model. We show that a multi-industry version of the Melitz model does not predict this relationship. Instead, it predicts the opposite relationship that industrial productivity increases more strongly in non-liberalized industries than in liberalized industries.

Keywords: trade liberalization; firm heterogeneity; industrial productivity (search for similar items in EconPapers)
JEL-codes: F12 F13 (search for similar items in EconPapers)
Date: 2013
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Related works:
Journal Article: THE IMPACT OF TRADE LIBERALIZATION ON INDUSTRIAL PRODUCTIVITY (2015)
Working Paper: The Impact of Trade Liberalization on Industrial Productivity (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4365

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