This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity and social welfare. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. We identify two effects of trade liberalization on productivity: a direct effect through changes in R&D investment, a...

This paper examines the response of industries and firms to changes in trade costs. Several new firm-level models of international trade with heterogeneous firms predict that industry productivity will rise as trade costs fall due to the reallocation of activity across plants within an industry. Using disaggregated U.S. import data, we create a new measure of trade costs over time and industrie...

__________________________________________________________________ This paper develops a methodology for predicting the impact of trade liberalization on exports by industry (3-digit ISIC) based on the pre-liberalization distribution of exports by product (5-digit SITC). Using the results of Kehoe and Ruhl (2013) that much of the growth in trade after trade liberalization is in products that ar...

A large share of world trade, especially among the OECD countries, is two-way trade within industries, so called intra-industry trade. Despite this, few attempts have been made to examine why countries export some products within industries, whereas they import others. We examine this issue, by means of regression analysis, by examining the shares of IIT that are vertical and horizontal and by ...

The article investigates the revealed comparative export advantage, relative import specialization advantage, relative trade advantage, intra-industry trade and its quality types in agrofood trade of Croatia, Hungary and Slovenia with the European Union (EU) market. The empirical results confirmed bulk of agro-food and forestry products with revealed comparative export advantages on the EU mark...

BACKGROUND The illicit tobacco trade results in huge losses of revenue to governments, estimated at $US40-50 billion in 2006, and in increased consumption and thus health problems because it makes tobacco available more cheaply. On 20 October 2008 the second meeting of the International Negotiating Body (INB2) on the illicit trade protocol of WHO's Framework Convention on Tobacco Control (FCTC)...

The paper investigates the effects of international trade in goods and capital movement on the productivity distribution and industry-wide productivity when countries are heterogeneous in the quality of their financial institutions. In autarky, firm heterogeneity in their productivities arises in countries with poor financial institutions, while all firms adopt a high-productivity technology in...

Our society’s dependence on chemicals is a comparatively recent phenomenon. The chemical industry today is a US$1.55 trillion global industry, nearly four times as big as it was just 30 years ago. World-wide, the industry employs some 12 million people. The chemical industry in OECD Member countries accounts for 76 per cent of world-wide production. Chemicals and related products represent 14 p...