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Trade Liberalization with Heterogeneous Firms
Graduate Institute of International Studies, Geneva, Switzerland.
Stockholm University, Faculty of Social Sciences, Department of Economics.
2010 (English)In: Review of Development Economics, ISSN 1363-6669, E-ISSN 1467-9361, Vol. 14, no 2, 161-176 p.Article in journal (Refereed) Published
Abstract [en]

This paper examines the various aspects of trade liberalization with heterogeneous firms using the Melitz (2003) model. We find a number of novel results and effects including a Stolper-Samuelson-like result and several results related to the volume of trade, which are empirically testable. We also analyze what might be called an anti-variety effect as the result of trade liberalization. We show that this effect is most pronounced for small countries. This resonates with the often voiced criticism from antiglobalists that globalization leads the world to become more homogeneous by eliminating local specialties. Nevertheless, we find that trade liberalization always leads to welfare gains in the model.

Place, publisher, year, edition, pages
2010. Vol. 14, no 2, 161-176 p.
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URN: urn:nbn:se:su:diva-49237DOI: 10.1111/j.1467-9361.2010.00545.xISI: 000276700600002OAI: diva2:376747
authorCount :2Available from: 2010-12-13 Created: 2010-12-13 Last updated: 2010-12-13Bibliographically approved

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Forslid, Rikard
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