Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80494
Authors: 
Segerstrom, Paul S.
Sugita, Yoichi
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4365
Abstract: 
This paper calls into question the currently most influential model of international trade. An empirical finding by Trefler (2004, AER) and others that industrial productivity increases more strongly in liberalized industries than in non-liberalized industries has been widely accepted as evidence for the Melitz (2003, Econometrica) model. We show that a multi-industry version of the Melitz model does not predict this relationship. Instead, it predicts the opposite relationship that industrial productivity increases more strongly in non-liberalized industries than in liberalized industries.
Subjects: 
trade liberalization
firm heterogeneity
industrial productivity
JEL: 
F12
F13
Document Type: 
Working Paper

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