Tariffs, trade and productivity: A quantitative evaluation of heterogeneous firm models
- Author(s)
- Holger Breinlich, Alejandro Cunat
- Abstract
We examine the quantitative predictions of heterogeneous firm in the context of the Canada-US Free Trade Agreement (CUSFTA) of 1989. We compute predicted increases in trade flows and measured productivity and compare them to the post-CUSFTA increases observed in the data. Most models predict increases in measured productivity that are too low by an order of magnitude relative to predicted increases in trade flows. A multi-product firm extension that allows for within-firm productivity increases has the potential to reconcile model predictions with the data.
- Organisation(s)
- Department of Economics
- External organisation(s)
- University of Essex
- Journal
- The Economic Journal
- Volume
- 126
- Pages
- 1660-1702
- No. of pages
- 43
- ISSN
- 0013-0133
- DOI
- https://doi.org/10.1111/ecoj.12218
- Publication date
- 09-2016
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502003 Foreign trade
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics
- Portal url
- https://ucrisportal.univie.ac.at/en/publications/tariffs-trade-and-productivity-a-quantitative-evaluation-of-heterogeneous-firm-models(19d2f3be-c314-4774-a8ac-23fb8a8584b5).html