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Title:Market entry costs, underemployment and international trade PDF Logo
Authors:Bougheas, Spiros
Riezman, Raymond
Issue Date:2010
Series/Report no.:CESifo working paper: Trade Policy 3263
Abstract:We develop a small, open economy, two-sector model with heterogeneous agents and endogenous participation in a labor matching market. We analyze the implications of asymmetric market entry costs for the patterns of international trade and underemployment. Furthermore, we examine the welfare implications of trade liberalization and find that under certain conditions the patterns of trade are not optimal. We also examine the robustness of our results when we allow for complementarities in the production function and for alternative matching mechanisms.
Subjects:entry costs
patterns of trade
underemployment
JEL:F16
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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