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The impact of trade with pure exporters

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  • Bo Gao
  • Mich Tvede

Abstract

We extend the Melitz model to include pure exporters and study how they influence economic performance. We find that the presence of pure exporters lowers the productivity premium of exporters. Moreover, if there is a large portion of pure exporters, then international trade lowers the average productivity, but not welfare. Moreover, we explore how trade liberalization in form of lower entry cost into foreign markets and lower variable export cost influences the distribution of firms between pure exporters, ordinary exporters and non‐exporters.

Suggested Citation

  • Bo Gao & Mich Tvede, 2022. "The impact of trade with pure exporters," Review of International Economics, Wiley Blackwell, vol. 30(1), pages 83-112, February.
    • Handle: RePEc:bla:reviec:v:30:y:2022:i:1:p:83-112
    DOI: 10.1111/roie.12554
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    References listed on IDEAS

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    Cited by:

    1. Doungdao Mahakitsiri & Wisarut Suwanprasert, 2023. "Who are pure exporters?," The World Economy, Wiley Blackwell, vol. 46(6), pages 1759-1781, June.

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