Multi-product Firms and Trade Liberalization

Released on by Andrew B. Bernard
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  • Multi-product Firms and Trade Liberalization Book Detail

  • Author : Andrew B. Bernard
  • Release Date : 2006
  • Publisher :
  • Genre : Free trade
  • Pages : 66
  • ISBN 13 :
  • File Size : 1,1 MB
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Multi-product Firms and Trade Liberalization by Andrew B. Bernard PDF Summary

Book Description: This paper develops a general equilibrium model of multi-product firms and analyzes their behavior during trade liberalization. Firm productivity in a given product is modeled as a combination of firm-level "ability" and firm-product-level "expertise", both of which are stochastic and unknown prior to the firm's payment of a sunk cost of entry. Higher firm-level ability raises a firm's productivity across all products, which induces a positive correlation between a firm's intensive (output per product) and extensive (number of products) margins. Trade liberalization fosters productivity growth within and across firms and in aggregate by inducing firms to shed marginally productive products and forcing the lowest-productivity firms to exit. Though exporters produce a smaller range of products after liberalization, they increase the share of products sold abroad as well as exports per product. All of these adjustments are shown to be relatively more pronounced in countries' comparative advantage industries.

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Trade, Location and Multiproduct Firms

Trade, Location and Multiproduct Firms

File Size : 69,69 MB
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In this paper we study how trade liberalization affects the location and the product scope of firms. We find that the largest and most productive multiproduct f