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Trade Liberalization with Heterogenous Firms

NBER Working Paper No. w12192
2006
  • 0
    Citations
  • 2,148
    Usage
  • 0
    Captures
  • 0
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Metric Options:   Counts1 Year3 Year

Metrics Details

  • Usage
    2,148
    • Abstract Views
      2,048
    • Downloads
      100
  • Ratings
    • Download Rank
      539,067

Paper Description

This paper examines the impact of trade liberalization with heterogeneous firms using the Melitz (2003) model. We find a number of novel results and effects including a Stolper-Samuelson like result and several results related to the volume of trade, which are empirically testable. We also find what might be called an anti-variety effect as the result of trade liberalization. This resonates with the often voiced criticism from antiglobalists that globalization leads the world to become more homogenous by eliminating local specialities. Nevertheless, we find that trade liberalization always leads to welfare gains in the model.

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