Productivity and Firm Selection
Quantifying the ‘New’ Gains from Trade
Bibliographic Data
| ID | 9719216 |
|---|---|
| Authors | Gregory Corcos (NHH (Norwegian School of Economics)), Massimo Del Gatto (0000-0002-3261-8038, G.d’Annunzio University and CRENoS), Giordano Mion (0000-0003-1420-0612, London School of Economics and Political Science), Gianmarco I P Ottaviano (London School of Economics, Bocconi University, CEP, CEPR and FEEM) |
| Year | 2012 |
| Volume | 122 |
| Issue | 561 |
| Pages | 754-798 |
| Publication date | 2012-06-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2011.02487.x |
| OpenAlex | W2330953603 |
| Language | EN |
| Citations received | 7 |
| References cited | 41 |
We discuss how standard computable equilibrium models of trade policy can be enriched with selection effects without missing other important channels of adjustment. This is achieved by estimating and simulating a partial equilibrium model that accounts for a number of real world effects of trade liberalisation: richer availability of product varieties; tougher competition and weaker market power of firms; better exploitation of economies of scale; and, of course, efficiency gains via the selection of the most efficient firms. The model is estimated on E.U. data and simulated in counterfactual scenarios that capture several dimensions of European integration. Simulations suggest that the gains from trade are much larger in the presence of selection effects. Even in a relatively integrated economy as the E.U., dismantling residual trade barriers would deliver relevant welfare gains stemming from lower production costs, smaller markups, lower prices, larger firm scale and richer product variety. We believe our analysis provides enough ground to support the inclusion of firm heterogeneity and selection effects in the standard toolkit of trade policy evaluation
Applied general equilibrium · Commercial policy · Competition (biology · Computable general equilibrium · Counterfactual thinking · Economics · Economies of scale · General equilibrium theory · International trade · Macroeconomics · Market power · Microeconomics · Partial equilibrium · Product (mathematics · Production (economics · Productivity · Selection (genetic algorithm · Trade barrier · Welfare · Yield (engineering · Computer Science · Economic Policies and Impacts · Global trade and economics · Regional Development and Policy
Market Size, Competition, and the Product Mix of Exporters
The Empirics of Firm Heterogeneity and International Trade
A micro‐founded approach to exploring gains from trade integration
Spatial frictions
Export Destination Characteristics and Markups
The Competitive Effects of Credit Constraints in the Global Economy
Tariffs, Trade and Productivity
Agglomeration and Trade Revisited
Plants and Productivity in International Trade
Technology, Geography, and Trade
Productivity and Turnover in the Export Market
An Estimate of the Effect of Common Currencies on Trade and Income
Trade Costs
The trade-creating effects of business and social networks
Reallocation, Firm Turnover, and Efficiency
Export Versus FDI with Heterogeneous Firms
Exceptional exporter performance
Trade Liberalization, Exit, and Productivity Improvements
Trade and Productivity
Market Size, Trade, and Productivity
Estimating Trade Flows
Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco
Distorted Gravity
Estimating Production Functions Using Inputs to Control for Unobservables
The Dynamics of Productivity in the Telecommunications Equipment Industry
The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity
Gravity with Gravitas
The Log of Gravity
Market Potential and the Location of Japanese Investment in the European Union
The Puzzling Persistence of the Distance Effect on Bilateral Trade
To share or not to share
Market Penetration Costs and the New Consumers Margin in International Trade
| Citations per year | 0.5 |
|---|---|
| Citation span | 2012 - 2021 (10) |
| Highly cited | No |