Open AccessTHE IMPACT OF TRADE LIBERALIZATION ON INDUSTRIAL PRODUCTIVITY
Author(s) -
Segerstrom Paul S.,
Sugita Yoichi
Publication year - 2015
Publication title -
journal of the european economic association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 7.792
H-Index - 93
eISSN - 1542-4774
pISSN - 1542-4766
DOI - 10.1111/jeea.12140
Subject(s) - productivity , economics , free trade , liberalization , empirical evidence , international economics , international trade , manufacturing , business , macroeconomics , market economy , philosophy , epistemology , marketing
An empirical finding by Trefler (2004, “The Long and Short of the Canada–U.S. Free Trade Agreement”, American Economic Review , 94(4), 870–895) and others that industrial productivity increases more strongly in liberalized industries than in nonliberalized industries has been widely accepted as evidence for the Melitz ([Melitz, Marc J., 2003], “The Impact of Trade on Intra‐Industry Reallocations and Aggregate Industry Productivity”, Econometrica , 71, 1695–1725) model. We show that under fairly standard assumptions 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 nonliberalized industries than in liberalized industries.
Accelerating Research
Robert Robinson Avenue,
Oxford Science Park, Oxford
OX4 4GP, United Kingdom
Address
John Eccles HouseRobert Robinson Avenue,
Oxford Science Park, Oxford
OX4 4GP, United Kingdom