Trade and growth with heterogeneous firms

Details

Serval ID
serval:BIB_93E0863C65FA
Type
Article: article from journal or magazin.
Collection
Publications
Title
Trade and growth with heterogeneous firms
Journal
Journal of International Economics
Author(s)
Baldwin R., Robert-Nicoud F.
ISSN
0022-1996
Publication state
Published
Issued date
01/2008
Peer-reviewed
Oui
Volume
74
Number
1
Pages
21-34
Language
english
Abstract
This paper explores the impact of trade on growth when firms are heterogeneous. We find that greater openness produces anti- and pro-growth effects. The Hopenhayn-Melitz-model selection effects raises the expected cost of introducing a new variety and this tends to slow the rate of new-variety introduction and hence growth. The pro-growth effect stems from the impact that freer trade has on the marginal cost of innovating. The balance of the two effects is ambiguous with the sign depending upon the exact nature of the innovation technology and its connection to international trade in goods and ideas. We consider five special cases (these include the Grossman-Helpman, the Coe-Helpman, and the Rivera-Batiz-Romer models) two of which suggest that trade harms growth; the others predicting the opposite.
Keywords
Trade and endogenous growth, Heterogeneous firms, Dynamic versus static efficiency, Variable barriers to trade, Technical barriers to trade
Web of science
Create date
27/10/2016 10:16
Last modification date
20/08/2019 14:56
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