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dc.contributor.authorRaff, Horsten_NZ
dc.contributor.authorStähler, Franken_NZ
dc.contributor.authorLong, Ngo Vanen_NZ
dc.date.available2011-04-07T03:06:01Z
dc.date.copyright2007-06en_NZ
dc.identifier.citationRaff, H., Stähler, F., & Long, N. V. (2007). The effects of trade liberalization on productivity and welfare: The role of firm heterogeneity, R&D and market structure (Economics Discussion Papers Series No. 710). University of Otago. Retrieved from http://hdl.handle.net/10523/1000en
dc.identifier.urihttp://hdl.handle.net/10523/1000
dc.description.abstractThis paper develops an oligopolistic model of international trade with heterogeneous firms and endogenous R&D to examine how trade liberalization affects firm and industry productivity, as well as social welfare. We identify four effects of trade liberalization on productivity: (i) a direct effect through changes in R&D investment; (ii) a scale effect due to changes in firm size; (iii) a selection effect due to inefficient firms leaving the market; and (iv) a market-share reallocation effect as efficient firms expand and inefficient firms reduce their output. We show how these effects operate in the short run when market structure is fixed, and in the long run when market structure is endogenous. Among the robust results that hold for any market structure are that trade liberalization (i) increases (decreases) aggregate R&D for low (high) trade costs; (ii) increases expected firm size if trade costs are high; and (iii) raises expected social welfare if trade costs are low. JEL classification: F12, F15en_NZ
dc.format.mimetypeapplication/pdf
dc.publisherUniversity of Otagoen_NZ
dc.relation.ispartofseriesEconomics Discussion Papers Seriesen_NZ
dc.subjectfirm heterogeneityen_NZ
dc.subjectR&Den_NZ
dc.subjectproductivityen_NZ
dc.subjectmarket structureen_NZ
dc.subjectInternational Tradeen_NZ
dc.subject.lcshHF Commerceen_NZ
dc.subject.lcshHF5601 Accountingen_NZ
dc.subject.lcshHG Financeen_NZ
dc.subject.lcshH Social Sciences (General)en_NZ
dc.subject.lcshHB Economic Theoryen_NZ
dc.titleThe effects of trade liberalization on productivity and welfare: The role of firm heterogeneity, R&D and market structureen_NZ
dc.typeDiscussion Paperen_NZ
dc.description.versionUnpublisheden_NZ
otago.bitstream.pages29en_NZ
otago.date.accession2007-07-30en_NZ
otago.schoolEconomicsen_NZ
otago.openaccessOpen
otago.place.publicationDunedin, New Zealanden_NZ
dc.identifier.eprints714en_NZ
otago.school.eprintsEconomicsen_NZ
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otago.relation.number710en_NZ
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