Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/64609 
Year of Publication: 
2012
Series/Report no.: 
Diskussionsbeitrag No. 1210
Publisher: 
Georg-August-Universität Göttingen, Department für Agrarökonomie und Rurale Entwicklung (DARE), Göttingen
Abstract: 
In this paper, we are going to reconsider the standard Viner Model [Viner, 1950] however under the premise of firm heterogeneity. By means of a graphical analysis we show that a consideration of the degree of firm heterogeneity is important for an evaluation of a preferential trade agreement. Depending on the degree of firm heterogeneity in the preferential country and the non-preferential country either a price increase and trade creation occurs or a price decrease and trade reduction. The standard Viner Model neither makes any predictions with regard to price changes nor can it explain trade reduction. The graphical analysis conducted here yields additional insights into the impacts of preferential trade agreements on trade.
Subjects: 
International Trade
Preferential Trade Agreements
Viner Model
Firm Heterogeneity
Intensive Margin
Extensive Margin
Document Type: 
Working Paper

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