Trade and Industrial Policies with Heterogeneous Firms: The Role of Country Asymmetries

Michael Pflüger and Stephan Russek

No 94, Working Papers from Bavarian Graduate Program in Economics (BGPE)

Abstract: This paper explores the role of country asymmetries for trade and industrial policies with heterogeneous firms. Our analysis delivers a number of novel results. First, trade policies, infrastructure policies and industrial policies which improve the business conditions in one country have negative productivity and welfare effects on the trading partner. Second, symmetric trade liberalization is immiserizing for a trading partner whose business conditions are inferior. Third, there are gains from trade even for a country whose monopolistically competitive sector with heterogeneous firms is wiped out by the switch from autarky to trade.

Keywords: firm heterogeneity; welfare; trade policies; industrial policies; business conditions (search for similar items in EconPapers)
JEL-codes: F12 F13 F15 L25 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2011-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://bgpe.cms.rrze.uni-erlangen.de/files/2023/0 ... ntry-Asymmetries.pdf First version, 2011 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bav:wpaper:094_pfluegerrussek

Access Statistics for this paper

More papers in Working Papers from Bavarian Graduate Program in Economics (BGPE) Contact information at EDIRC.
Bibliographic data for series maintained by Anton Barabasch ().