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- Title
Ricardian trade and the impact of domestic competition on export performance.
- Authors
Bombardini, Matilde; Kurz, Christopher J.; Morrow, Peter M.
- Abstract
This paper develops and empirically examines a model of relative productivity differences both within and across industries for small open economies. We decompose the effect of industry productivity on export performance into direct effect of own-firm productivity and an indirect effect of higher peer-firm productivity. In a sample of Chilean and Colombian plants, we find evidence of both a positive direct effect and a negative indirect effect. The empirical evidence supports our theoretical prediction that industry-specific factors of production and asymmetric substitutability between domestic and foreign varieties drive the negative indirect effect. JEL classification: F10, F11, F12
- Subjects
EXPORTS; RICARDIAN Model of International Trade; ECONOMIC impact; ECONOMIC competition; PREDICTION models; INDUSTRIAL productivity; ECONOMICS
- Publication
Canadian Journal of Economics, 2012, Vol 45, Issue 2, p585
- ISSN
0008-4085
- Publication type
Article
- DOI
10.1111/j.1540-5982.2012.01715.x