Motivated by the non-linear and S-shaped pattern between trade liberalization and capital inflow observed in cross country data, this paper offers a new perspective in understanding the relation between these two. The static model nests Melitz style heterogenous firms with endogenous mark-up within a classical Heckscher-Ohlin style comparative advantage frame work. In this integrated model trad...

This paper investigates the implications for international markets of the existence of retailers/wholesalers with market power. Two main results are shown. First, in the presence of buyer power trade liberalization may lead to retail market concentration. Due to this concentration retail prices may be higher and welfare may be lower in free trade than in autarky, thus reversing the standard e¤e...

Does trade liberalization foster total factor productivity (TFP) growth in the manufacturing sector? Does sectoral trade orientation determine sectoral TFP levels and growth rates? These questions are addressed using pooled pre-and post-liberalization panel data from Cameroonian firms of eight manufacturing industries. A single production function for the whole manufacturing sector is estimated...

Are trade blocs stumbling blocks or building blocks? This chapter reviews many political economy arguments. First come those that suggest that regionalism undermines support for more generalized liberalization. Then we consider arguments that say that regional initiatives help build political momentum for global liberalization. Arguments as to how the adoption of a regional trading area might p...

This paper compares sequential trade liberalization through a preferential trade agreement (PTA) and one-shot multilateral trade liberalization with respect to the speed with which countries attain multilateral free trade. We build a three-country oligopoly model, including one developing country whose domestic firm initially uses old technology. Firm-level adoption of new technology and countr...

In this paper, we merge the heterogenous firm model of Melitz (2003) with the Ricardian model of Dornbusch, Fisher and Samuelson (DFS 1977) to explain how the pattern of international specialization and trade is determined by the interaction of comparative advantage, economies of scale, country sizes and trade barriers. The model is able to capture the existence of inter-industry trade and intr...

this paper examines the effects of agricultural land productivity improvement on the economy of iran assuming that the domestic and international trade liberalizations will open up the opportunities to expand market access. a 25-sector computable general equi-librium model was developed to simulate the effects of this policy. the simulation results indicate that enhancing agricultural land prod...

This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity and social welfare. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. We identify two effects of trade liberalization on productivity: a direct effect through changes in R&D investment, a...

__________________________________________________________________ This paper develops a methodology for predicting the impact of trade liberalization on exports by industry (3-digit ISIC) based on the pre-liberalization distribution of exports by product (5-digit SITC). Using the results of Kehoe and Ruhl (2013) that much of the growth in trade after trade liberalization is in products that ar...

The world has witnessed an unparalleled increase in trade liberalization over the last few decades. These have been accompanied by increasing concerns over economic growth and distributional impacts emerging from trade agreements. An applied literature has emerged to address ex-ante effects at both macroeconomic and household levels. This article contributes to this literature by analyzing the ...