Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73353
Authors: 
Bauer, Christian
Year of Publication: 
2008
Series/Report no.: 
BGPE Discussion Paper 56
Abstract: 
We investigate the impact of incremental trade liberalization in a dynamic model of endogenous growth with heterogeneous firms and costly trade. Growth originates from horizontal specialization and the steady state productivity growth rate is positive. Innovations require costly R&D and are conducted by profit-seeking researchers. Including physical capital as a factor of production, we find that after appropriate adjustments in the production structure, previous results on the reallocation of resources and the selection of firms following trade liberalization continue to hold. We show, however, that unlike in the Melitz (2003) model, the reallocation effect does not work through increases in the factor price in production.
Subjects: 
Productivity
entry costs
heterogeneous firms
trade Liberalization
JEL: 
F12
F13
O31
O41
Document Type: 
Working Paper

Files in This Item:
File
Size





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