The choice of modeling firm heterogeneity and trade restrictions

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dc.contributor.author Cole, Matthew T.
dc.date.accessioned 2010-11-30T14:31:44Z
dc.date.available 2010-11-30T14:31:44Z
dc.date.issued 2009-10-23
dc.identifier.uri http://hdl.handle.net/10197/2618
dc.description.abstract There has been great focus in the recent trade theory literature on the introduction of firm heterogeneity into trade models. However, these models tend to rely heavily on symmetry assumptions and assume melting iceberg transport costs as the only form of trade restrictions. Moreover, a standard assumption is that firms differ across marginal cost, yet empirical evidence suggests this is not the only important source of heterogeneity. I provide a highly tractable model, in which firms differ across fixed costs, that qualitatively maintains the main results of these models, but allows for asymmetric changes in trade restrictions, a necessary step towards studying strategic trade policy. In addition, I highlight the differences in the effects on product variety associated with changes in an ad valorem tariff, iceberg transport costs, and additional beachhead costs to become an exporter. This is important as there are potential offsetting effects on firm entry. en
dc.description.sponsorship Not applicable en
dc.format.extent 196793 bytes
dc.format.mimetype application/pdf
dc.language.iso en en
dc.publisher University College Dublin. School of Economics en
dc.relation.ispartofseries UCD Centre for Economic Research Working Paper Series en
dc.relation.ispartofseries Wp 09 20 en
dc.relation.requires Economists Online Collection en
dc.subject Intra-industry trade en
dc.subject Trade policy en
dc.subject Firm heterogeneity en
dc.subject Monopolistic competition en
dc.subject.classification F10 en
dc.subject.classification F13 en
dc.subject.classification F15 en
dc.subject.lcsh Intra-industry trade--Econometric models en
dc.subject.lcsh Commercial policy en
dc.subject.lcsh Monopolistic competition en
dc.title The choice of modeling firm heterogeneity and trade restrictions en
dc.type Working Paper en
dc.internal.availability Full text available en
dc.internal.webversions Publisher's version en
dc.internal.webversions http://www.ucd.ie/t4cms/wp09.20.pdf en
dc.status Not peer reviewed en
dc.neeo.contributor Cole|Matthew T.|aut| en


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