Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/56347 
Year of Publication: 
2010
Series/Report no.: 
SSE/EFI Working Paper Series in Economics and Finance No. 727
Publisher: 
Stockholm School of Economics, The Economic Research Institute (EFI), Stockholm
Abstract: 
In this paper, we present a standard quality ladders endogenous growth model with one significant new assumption, that it takes time for firms to learn how to export. We show that this model without Melitz-type assumptions can account for all the evidence that the Melitz (2003) model was designed to explain plus much evidence that the Melitz model cannot account for. In particular, consistent with the empirical evidence, we find that trade liberalization leads to a higher exit rate of firms, that exporters charge higher prices for their products and that many large firms do not export.
Subjects: 
Trade liberalization
heterogeneous firms
quality ladders
endogenous growth
JEL: 
F12
F13
F43
O31
O41
Document Type: 
Working Paper

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