Blyde, Juan and Iberti, Gonzalo (2010): Trade costs, resource reallocation and productivity in developing countries.
Download (941kB) | Preview
An increasing body of evidence indicates that an important share of aggregate productivity growth, in both developed and developing countries, arises from the reallocation of resources across plants of different productivity levels. New trade models with heterogeneous firms (Bernard et al., 2003; Melitz, 2003) suggest that international trade plays an important role in this reallocative process. Focusing on a developing country, Chile, we use explicit measures of trade costs to explore the existence of the channels suggested by these new trade models. We provide new key findings for developing countries: first, trade costs affect the reallocative process by protecting inefficient producers, lowering their likelihood to exit, and also by limiting the expansion of efficient plants, lowering their likelihood to export. Second, the reallocative impacts of trade arise not only from tariff barriers but also from transport costs.
|Item Type:||MPRA Paper|
|Original Title:||Trade costs, resource reallocation and productivity in developing countries|
|Keywords:||Trade costs, productivity, resource reallocation|
|Subjects:||F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations
F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance
|Depositing User:||Juan Blyde|
|Date Deposited:||18. Mar 2010 18:29|
|Last Modified:||21. Feb 2015 15:28|
Ai, Chunrong, and Edward C. Norton (2003). “Interaction Terms in Logit and Probit Models”. Economics Letters. Vol 80: 123-129.
Alvarez, Roberto, and Ricardo López. 2005. “Exporting and Performance: Evidence from Chilean Plants”. Canadian Journal of Economics. Vol 38, No.4: 1385-1400.
Aw, B., S., Chung, and M. Roberts (2000). “Productivity and turnover in the export market: micro-level evidence from the Republic of Korea and Taiwan (China), World Bank Economic Review, 14, 65-90
Bartelsman, E., J. Haltiwanger, and S. Scarpetta (2004). "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," IZA Discussion Papers 1374, Institute for the Study of Labor (IZA)
Bernard, A. B., Eaton, J., Jensen, J. B., Kortum, S. S. (2003). “Plants and productivity in international trade” American Economic Review 93 (4), 1268-1290.
Bernard, A. B., and B. Jensen (1999). "Exceptional Exporter Performance: Cause, Effect, or Both?" Journal of International Economics, 47(1), pp. 1-25
Bernard, A. B., and B. Jensen (2004). "Exporting and Productivity in the USA", Oxford Review of Economic Policy, Vol. 20, No. 3
Bernard, A. B., B. Jensen, J. Bradford and P. Schott (2006). “Trade costs, firms and productivity”. Journal of Monetary Economics 53, 917-937.
Clerides, S., S. Lach, and J. Tybout (1998). “Is Learning by Exporting Important? Micro-dynamic Evidence from Colombia, Mexico and Morocco”, Quarterly Journal of Economics, 113.
Eslava, M., J. Haltiwanger, A. Kugler, and M. Kugler (2009) “Trade Reforms and Market Selection: Evidence from Manufacturing Plants in Colombia”, mimeo.
Harrison, Ann (1994). “Productivity, Imperfect Competition and Trade Reform: Theory and Evidence” Journal of International Economics, 36.
Hsieh, C. and P. Klenow (2007). "Misallocation and Manufacturing TFP in China and India," UC Berkeley mimeo.
Hummels, D. and V. Lugovskyy (2006). "Are Matched Partner Trade Statistics a Usable Measure of Transportation Costs?," Review of International Economics, vol. 14(1), pages 69-86, 02
IDB 2008 “Unclogging the Arteries: The Impact of Transport Costs on Latin American and Caribbean Trade” Special Report on Integration and Trade, Inter-American Development Bank.
Levinsohn, James and Petrin, Ariel (2003). “Estimating production functions using imputs to control for unobservables” Review of Economics Studies 70, 317-341.
Liu, L. (1993) “Entry-Exit, Learning and Productivity Change: Evidence from Chile” Journal of Development Economics, 42: 217-42
Liu, L. and J. Tybout (1996) “Productivity Growth in Colombia and Chile: Panel-Based Evidence on the Role of Entry, Exit and Learning” in marke Roberts and James Tybout, (eds), Industrial Evolution in Developing Countries, New York: Oxford University Press.
Melitz, M.J. (2003) “The impact of trade on intra-industry reallocations and aggregate industry productivity” Econometrica 71, 1695-1725
Melitz, M. and G. Ottaviano (2008) “Market Size, Trade, and Productivity," Review of Economic Studies, vol. 75(1), pages 295-316, 01
Moreira Mesquita, M., C. Volpe and J. Blyde. 2008 Unclogging the Arteries: The Impact of Transport Costs on Latin American and Caribbean Trade, Special Report on Integration and Trade. Washington, DC, United States: Inter-American Development Bank.
Nicita, A. and M. Ollarreaga (2006) “Trade, Production and Protection 1976-2004”, World Bank document.
Pavcnik, N. (2002). “Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants” Review of Economic Studies, 69
Tybout, J. (1991) “Linking Trade and Productivity: New Research Directions” World Bank Economic Review 6: 189-212