Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288159 
Year of Publication: 
2023
Citation: 
[Journal:] International Economic Review [ISSN:] 1468-2354 [Volume:] 64 [Issue:] 4 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2023 [Pages:] 1715-1747
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
This article analyzes the role of credit frictions in a trade model where producers differ in their capabilities to conduct process and quality innovations and require external finance for investments. Accounting for cost‐based and quality‐based sorting of firms in a unified framework allows us to demonstrate that the reactions of prices and commonly used productivity measures do not necessarily reflect welfare implications. Credit frictions lead to distortions through aggravated access to finance and endogenous price adjustments so that the responses of quantity‐based and revenue‐based productivity differ substantially. In counterfactual scenarios, we show that these differential effects are quantitatively important.
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.