Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/77431
Authors: 
Ito, Tadashi
Year of Publication: 
2008
Series/Report no.: 
HEID Working Paper 06/2008
Abstract: 
Using NAFTA's effect on Mexico's exports as a natural experiment, this paper conducts an empirical analysis on the explanatory power of the two strands of heterogeneous firms trade models: the heterogeneous firms trade (HFT) model and the quality heterogeneous firms trade (QHFT) model. The paper first discusses the common prediction of the two models on new goods' exports and on the contrasting prediction on unit price evolution. An empirical analysis shows a strong supportive evidence on the common prediction, i.e., NAFTA's positive impact on new goods exports from Mexico to the US. The paper then proposes a simple way to check the explanatory power of the models on unit price evolution, and finds no evidence in favour of either model.
Subjects: 
NAFTA
Exports Diversificaion
JEL: 
F14
F15
Document Type: 
Working Paper

Files in This Item:
File
Size
358.22 kB





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