This paper argues that trade liberalization has a potentially significant impact on financial leverage. We compare the predictions of the trade-off model of capital structure with the pecking order model. In the first case, we suggest that trade liberalization affects the trade-off between the tax advantages of debt and expected bankruptcy costs. This implies that a reduction in domestic tariff...

I develop a model of heterogeneous land quality and study the relation between trade, farming productivity and welfare in Peru, where high domestic and international trade costs pose a major barrier to efficient farming. To quantify the model, I use a new dataset on spatially disaggregated crop prices, yields and land allocations. I then use the model to measure the welfare and productivity eff...

Until the Uruguay Round Agreement (URAA) domestic support received less attention and it was URAA explicitly addressed the trade distortions arising out of domestic support policies in agriculture. The theories on trade distortions however claim the supremacy of border measures in distorting trade. A number of empirical studies also hold the same line of view. There are a number of reasons for ...

Present paper is an attempt to estimate the impact of Economic and Geographic indicators in trade among Islamic countries according to a bilateral trade model as Gravity model, and study the relationship between Economy, Geography and Trade in this way. Fixed effect version of the panel data estimation producer with OIC member country data spanning over the 2007–2012. The result of this researc...

How large are the welfare gains from trade when factors are misallocated due to domestic distortions? In this paper I provide a quantitative answer to this question by incorporating distortions to the allocation of labor across broad sectors into a model of structural change and Ricardian trade. Calibrating the model using 36 years of data for a diverse set of countries I find that (1) gains fr...

The primary goal of any economic policy in the production front is, as far as possible to enhance the degree of sectoral interrelatedness (henceforh SI) within the home economy. The focal objective of such policy is not only to increase the sectoral value added of the economy but also to improve the position of the trade balance in the commodity trade front. Iran, being characterized a sole mon...

This paper investigates the link between domestic income inequality and international trade using a dynamic model of occupational choice. After showing how systematic patterns of comparative advantage arise among countries with no di®erences in their economic fundamentals, I provide two results regarding trade liberalization describing the full transition dynamics. First, international income d...

We find that trade and domestic market size are robust determinants of economic growth over the 1960-1996 period when trade openness is measured as the US dollar value of imports and exports relative to GDP in PPP US$ (“real openness”). When trade openness is measured as the US dollar value of imports and exports relative to GDP in exchange rate US$ (“nominal openness”) however, trade and the s...