Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2011-01-20
Number: 11-013/2
Author-Name: Julian Emami Namini
Author-Workplace-Name: Erasmus University Rotterdam
Author-Name: Giovanni Facchini
Author-Workplace-Name: Erasmus University Rotterdam
Author-Name: Ricardo A. Lopez
Author-Workplace-Name: Brandeis University, Waltham
Title: Export Growth and Factor Market Competition: Theory and Some Evidence
Abstract: Empirical evidence suggests that sectoral export growth decreases exporters' survival probability, whereas this is not true for non-exporters. Models with firm heterogeneity in total factor productivity (TFP) predict the opposite. To solve this puzzle, we develop a two{factor framework where firms differ in factor intensities. Thus, export growth increases competition for the factor used intensively by exporters, eliminating some of them, while non-exportersbenefit. Interacting heterogeneity in factor shares with heterogeneity in TFP we show that factor market competition reduces the growth in average TFP brought about by trade liberalization.
Classification-JEL: F12, F14, F16, L11
Keywords: Firm dynamics, two-factor trade model, firm heterogeneity in factor input ratios
File-Url: https://papers.tinbergen.nl/11013.pdf
File-Format: application/pdf
File-Size: 379930 bytes
Handle: RePEc:tin:wpaper:20110013