IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/24767.html
   My bibliography  Save this paper

Trade, Resource Reallocation and Industry Heterogeneity

Author

Listed:
  • Blyde, Juan

Abstract

Recent trade models with heterogeneous firms (Bernard et al., 2003 and Melitz, 2003) show how lower trade costs can spur aggregate productivity by forcing lower productivity firms out of the market, cutting off the lower tail of the productivity distribution. In this paper we find significant heterogeneity regarding this impact across different industries. In particular, we find that the exit of inefficient plants due to stronger import competition is very prominent in light industries, that is, in industries in which only a limited amount of capital is needed and where most plants are of small-scale. In contrast, we find no significant effects of import competition on the exit of plants in heavy industries. The result has important policy implications regarding the role of trade reform in boosting aggregate productivity, particularly in industries with high levels of distortions.

Suggested Citation

  • Blyde, Juan, 2010. "Trade, Resource Reallocation and Industry Heterogeneity," MPRA Paper 24767, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:24767
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/24767/1/MPRA_paper_24767.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 903-947.
    2. Maurice Kugler & John Haltiwanger & Adriana Kugler & Marcela Eslava, 2009. "Trade Reforms and Market Selection: Evidence from Manufacturing Plants in Colombia," 2009 Meeting Papers 615, Society for Economic Dynamics.
    3. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    4. Roberto Alvarez & Ricardo A. López, 2005. "Exporting and performance: evidence from Chilean plants," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(4), pages 1384-1400, November.
    5. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blyde, Juan & Iberti, Gonzalo & Mesquita Moreira, Mauricio, 2009. "Integration, resource reallocation and productivity: the cases of Brazil and Chile," MPRA Paper 21269, University Library of Munich, Germany.
    2. Juan Blyde & Gonzalo Iberti, 2012. "Trade Costs, Resource Reallocation and Productivity in Developing Countries," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 909-923, November.
    3. Francesco Serti & Chiara Tomasi, 2008. "Self-Selection and Post-Entry Effects of Exports: Evidence from Italian Manufacturing Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 660-694, December.
    4. Maria Bas & Vanessa Strauss-Kahn, 2014. "Does importing more inputs raise exports? Firm-level evidence from France," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(2), pages 241-275, May.
    5. Matthew A. Cole & Robert J. R. Elliott & Supreeya Virakul, 2010. "Firm Heterogeneity, Origin of Ownership and Export Participation," The World Economy, Wiley Blackwell, vol. 33(2), pages 264-291, February.
    6. Ana M. Fernandes & Alberto E. Isgut, 2015. "Learning-by-Exporting Effects: Are They for Real?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(1), pages 65-89, January.
    7. Néstor Gandelman & Verónica Alaimo & Marcelo Olarreaga & José Luis Guasch & Daniel Lederman & Carlos Casacuberta & Ana María Oviedo & J. Humberto López & Inessa Love & Guido Porto & Pablo Fajnzylber &, 2009. "Does the Investment Climate Matter?: Microeconomic Foundations of Growth in Latin America," IDB Publications (Books), Inter-American Development Bank, number 60058 edited by José Luis Guasch & J. Humberto López & Pablo Fajnzylber, February.
    8. Alvaro Garcia-Marin & Nico Voigtländer, 2019. "Exporting and Plant-Level Efficiency Gains: It's in the Measure," Journal of Political Economy, University of Chicago Press, vol. 127(4), pages 1777-1825.
    9. Albert Park & Dean Yang & Xinzheng Shi & Yuan Jiang, 2010. "Exporting and Firm Performance: Chinese Exporters and the Asian Financial Crisis," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 822-842, November.
    10. Roberto Alvarez & Ricardo A. López, 2008. "Entry and Exit in International Markets: Evidence from Chilean Data," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 692-708, September.
    11. Melaku Abegaz & Sajal Lahiri, 2020. "Entry and Survival in the Export Market: Spillovers from Foreign and Outward-Looking Domestic Firms in Ethiopia," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(4), pages 847-872, September.
    12. Ana M. Fernandes & Alberto E. Isgut, 2005. "Learning-by-Doing, Learning-by-Exporting, and Productivity: Evidence from Colombia," DEGIT Conference Papers c010_018, DEGIT, Dynamics, Economic Growth, and International Trade.
    13. World Bank, 2007. "Economic Performance in Latin America and the Caribbean : A Microeconomic Perspective," World Bank Publications - Reports 7857, The World Bank Group.
    14. Sharma, Chandan & Mishra, Ritesh Kumar, 2015. "International trade and performance of firms: Unraveling export, import and productivity puzzle," The Quarterly Review of Economics and Finance, Elsevier, vol. 57(C), pages 61-74.
    15. Irene Brambilla & Nicolas Depetris Chauvin & Guido Porto, 2017. "Examining the Export Wage Premium in Developing Countries," Review of International Economics, Wiley Blackwell, vol. 25(3), pages 447-475, August.
    16. Jože P. Damijan & Črt Kostevc, 2006. "Learning-by-Exporting: Continuous Productivity Improvements or Capacity Utilization Effects? Evidence from Slovenian Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(3), pages 599-614, October.
    17. repec:wsr:fiwspe:y:2012:i:005 is not listed on IDEAS
    18. Kasahara, Hiroyuki & Lapham, Beverly, 2013. "Productivity and the decision to import and export: Theory and evidence," Journal of International Economics, Elsevier, vol. 89(2), pages 297-316.
    19. Kazuhiko Yokota & Kyosuke Kurita & Shujiro Urata, 2016. "In Search of the Learning-by-Exporting Effect: Role of Economies of Scale and Technology," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-27, June.
    20. Gandelman, Néstor & Alaimo, Veronica & Olarreaga, Marcelo & Guasch, José Luis & Lederman, Daniel & Casacuberta, Carlos & Oviedo, Ana María & López, J. Humberto & Love, Inessa & Porto, Guido & Fajnzylb, 2009. "Does the Investment Climate Matter?: Microeconomic Foundations of Growth in Latin America," IDB Publications (Books), Inter-American Development Bank, number 359, December.
    21. Ruohan Wu & Mario Javier Miranda, 2015. "Exports, investment and production growth: A dynamic heterogeneous firm model with learning and entry costs," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(8), pages 1037-1053, December.

    More about this item

    Keywords

    Trade costs; productivity; resource reallocation;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:24767. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.