The Impact of Trade Liberalization on Industrial Productivity

Paul Segerstrom and Yoichi Sugita

No 9952, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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: Firm heterogeneity; Industrial productivity; Trade liberalization (search for similar items in EconPapers)
JEL-codes: F12 F13 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-eff and nep-int
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Citations: View citations in EconPapers (1)

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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 (2013)
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