Service interruption on Monday 11 July from 12:30 to 13:00: all the sites of the CCSD (HAL, EpiSciences, SciencesConf, AureHAL) will be inaccessible (network hardware connection).
Skip to Main content Skip to Navigation
Journal articles

Disentangling trade reform impacts on firm market and production decisions

Abstract : This paper disentangles the impacts of trade liberalization on firm market and production decisions. Using firm-product data for Ecuador, we exploit exogenous tariff changes at entry to the World Trade Organization and find positive effects of trade liberalization on revenue total factor productivity (TFP-R). Input-trade liberalization improves firm efficiency, measured by quantity total factor productivity (TFP-Q) and leads firms to raise their markups and to introduce new products following an increase in imported input quality. Output-trade liberalization also improves firm efficiency and raises marginal costs as firms increase input quality and improve the quality of their core products. Firms’ markups and product scope decrease. Chinese imports also contributed positively to productivity while the exchange rate's volatility prior to dollarization had reverse effects. We find positive welfare effects as consumers were offered better and cheaper products. Trade liberalization also benefited the more productive firms introduce new or better products while less productive firms were more likely to exit.
Complete list of metadata

https://hal.archives-ouvertes.fr/hal-03211401
Contributor : Maria Bas Connect in order to contact the contributor
Submitted on : Wednesday, April 28, 2021 - 4:45:26 PM
Last modification on : Friday, April 29, 2022 - 10:12:43 AM

Links full text

Identifiers

Collections

Citation

Maria Bas, Caroline Paunov. Disentangling trade reform impacts on firm market and production decisions. European Economic Review, Elsevier, 2021, 135, pp.103726. ⟨10.1016/j.euroecorev.2021.103726⟩. ⟨hal-03211401⟩

Share

Metrics

Record views

24