Trade Adjustment Costs in Developing Countries: - World Bank ...

More documents

Recommendations

Info

Market Penetration Cost and International Trade 297Sales Distribution of French FirmsRatio of US imports from Mexico in 90–97 and 90–92Figure 19.1: Cross-sectional and Comparative Static Predictions of the ModelData Source: Eaton, Kortum and Kramarz (2008) and www.sourceoecd.org tabulated by Arkolakis(2008a).that the sales distribution is dominated by small exporters: the individual salesof at least 25 per cent of French firms in Portugal are below $10,000. The fixedcost model overpredicts the sales of the smallest exporters, however it predictswell the sales of the largest exporters. The model with endogenous costs does
298Costas Arkolakis and Olga Timoshenkowell where the fixed cost model does well, but, in addition, it also predicts thepredominance of small exporting firms. The reason for the improved predictionsis that firms with low productivity are able to penetrate the market by payingsmall endogenous market entry costs to reach only a few consumers and, as aresult, attain low levels of export sales in the market.The model of endogenous market penetration costs yields non-trivialpredictions regarding the response of trade flows by goods to changes in tradepolicy. Since firms are allowed to make decisions regarding what fraction ofconsumers to reach, the demand function departs from the Dixit–Stiglitz demandused in the fixed cost models. As a result, the elasticity of demand with respectto trade costs is not constant across goods of different types. In particular, theelasticity of trade has two components. The first component (intensive margin)is the same as in the Dixit–Stiglitz context and originates from the per consumersales elasticity. The second component (extensive margin) originated due to thefact that the number of consumers reached by the firm changes in response to achange in trade costs. Thus, as trade costs fall, the sales of a firm increase perconsumer, as well as due to the increase in the number of consumers. Theinterplay of the intensive and extensive margins of trade is what allows theendogenous cost model to match the prediction of the trade flows more closely.Arkolakis (2008a) shows that the implications of the endogenous cost model areconsistent with the recent findings regarding trade liberalization episodes: goodswith little, but positive, trade before a liberalization are the ones that experience thehighest growth rates after the episode, as depicted in the bottom panel of Figure19.1. The figure uses the data on US total imports from Mexico in 1997–98 and1990–92. The previously traded goods are split into deciles depending on how muchthey were traded before the liberalization. The data reveal an interesting pattern:the growth rate of the goods is higher the less traded the goods were before theliberalization episode. This pattern is predicted by the calibrated model withendogenous market penetration costs. In addition, goods that were not traded beforeliberalization have a much smaller share in new trade, given that they are traded invery small amounts after the liberalization episode. In this case the calibrated modelwith fixed entry costs predicts identical changes in trade flows for each category ofgoods, while the endogenous cost model delivers a close match to the data. Itcaptures very well the growth of the goods with least trade, since the model predictshigher trade elasticity with respect to trade costs for lower productivity firms.In a follow up paper, Arkolakis (2008b) shows that adding market penetrationcosts is a fruitful assumption when considering individual firm growth. Inparticular, a model of productivity dynamics combined with endogenous marketpenetration costs would imply that new entrants are small and grow fast inaccordance with the data. Both are predominantly empirical findings for individualexporters and firms overall as reported by Eaton, et al. (2008) and Dunne,et al. (1988). Instead, the fixed cost benchmark implies large entrants with growthrates that are smaller than the ones implied in the data. In the next section wediscuss the implications of modeling endogenous market penetration costs forinternational development.
Page 1 and 2:
THE WORLD BANKTrade Adjustment Cost
Page 3 and 4:
Trade Adjustment Costs in Developin
Page 6:
Trade Adjustment Costsin Developing
Page 9 and 10:
viiiContents10. Trade Adjustment an
Page 11 and 12:
List of Tables2.1 Simulated Adjustm
Page 13 and 14:
List of Figures2.1 Worker Flows 262
Page 16:
PrefaceThe process of globalization
Page 19 and 20:
2Bernard Hoekman and Guido Portopri
Page 21 and 22:
4Bernard Hoekman and Guido Portoequ
Page 23 and 24:
6Bernard Hoekman and Guido Portowou
Page 25 and 26:
8Bernard Hoekman and Guido Portoass
Page 27 and 28:
10Bernard Hoekman and Guido Portoco
Page 29 and 30:
12Bernard Hoekman and Guido PortoJa
Page 31 and 32:
14Bernard Hoekman and Guido Portoma
Page 33 and 34:
16Bernard Hoekman and Guido Portoju
Page 35 and 36:
18Bernard Hoekman and Guido Portoat
Page 37 and 38:
20Bernard Hoekman and Guido PortoRE
Page 40:
PART AADJUSTMENT COSTS
Page 43 and 44:
26Carl Davidson and Steven Matusz2.
Page 45 and 46:
28Carl Davidson and Steven Matuszne
Page 47 and 48:
30Carl Davidson and Steven Matuszwh
Page 49 and 50:
32Carl Davidson and Steven MatuszTa
Page 51 and 52:
34Carl Davidson and Steven MatuszSo
Page 53 and 54:
36Carl Davidson and Steven MatuszHi
Page 55 and 56:
38Erhan Artuç and John McLarenof i
Page 57 and 58:
40Erhan Artuç and John McLarenshoc
Page 59 and 60:
42Erhan Artuç and John McLaren1.3
Page 61 and 62:
44Erhan Artuç and John McLarenassu
Page 63 and 64:
46Erhan Artuç and John McLarenin A
Page 65 and 66:
48Erhan Artuç and John McLarenavai
Page 67 and 68:
50Erhan Artuç and John McLarencomp
Page 69 and 70:
52Erhan Artuç and John McLarenFigu
Page 71 and 72:
Page 73 and 74:
Page 76 and 77:
4Reallocation and Adjustment in the
Page 78 and 79:
Reallocation and Adjustment in the
Page 80 and 81:
Page 82 and 83:
Page 84 and 85:
Page 86 and 87:
Page 88 and 89:
5Trade Reforms in Natural-Resource-
Page 90 and 91:
Trade Reforms in Natural-Resource-A
Page 92 and 93:
Page 94 and 95:
Page 96 and 97:
Page 98 and 99:
Page 100 and 101:
Page 102 and 103:
Page 104:
Page 107 and 108:
90Olivier Cadot, Laure Dutoit and M
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
100Olivier Cadot, Laure Dutoit and
Page 120 and 121:
7Trade Reform, Employment Allocatio
Page 122 and 123:
Trade Reform, Employment Allocation
Page 124 and 125:
Page 126 and 127:
Page 128 and 129:
Page 130 and 131:
Page 132 and 133:
Page 134 and 135:
Page 136 and 137:
Page 138 and 139:
Page 140 and 141:
Page 142 and 143:
Page 144 and 145:
Page 146 and 147:
Page 148 and 149:
Page 150 and 151:
Page 152 and 153:
Page 154 and 155:
Page 156 and 157:
Page 158:
Page 161 and 162:
144Gordon H HansonOn the theory sid
Page 163 and 164:
146Gordon H Hansonberg et al. (2008
Page 165 and 166:
148Gordon H HansonThe expansion of
Page 167 and 168:
150Gordon H Hansonshares and factor
Page 169 and 170:
152Gordon H HansonGoldberg, Pinelop
Page 172 and 173:
9Production Offshoring andLabor Mar
Page 174 and 175:
Production Offshoring and Labor Mar
Page 176 and 177:
Page 178 and 179:
Page 180 and 181:
Page 182 and 183:
Page 184 and 185:
Page 186:
Page 189 and 190:
172Pravin Krishna and Mine Zeynep S
Page 191 and 192:
Page 193 and 194:
Page 196 and 197:
11Trade, Child Labor, and Schooling
Page 198 and 199:
Trade, Child Labor, and Schooling i
Page 200 and 201:
Page 202 and 203:
Page 204 and 205:
Page 206 and 207:
Page 208 and 209:
Page 210 and 211:
Page 212:
Page 215 and 216:
198Gordon H Hanson3.0%2.8%2.6%2.4%2
Page 217 and 218:
200Gordon H HansonTable 12.2: Share
Page 219 and 220:
202Gordon H HansonWho benefits from
Page 221 and 222:
204Gordon H HansonAn older and larg
Page 223 and 224:
206Gordon H HansonTo date, the lite
Page 225 and 226:
208Gordon H Hansontion surplus was
Page 227 and 228:
210Gordon H HansonSome evidence sug
Page 229 and 230:
212Gordon H HansonBIBLIOGRAPHYAcost
Page 231 and 232:
214Gordon H HansonMishra, Prachi 20
Page 233 and 234:
216James Harrigan• China had been
Page 235 and 236:
218James Harrigan2.2 Price and quan
Page 237 and 238:
220James HarriganFigure 13.1a: Pric
Page 239 and 240:
222James Harrigan4. CONCLUSIONThe e
Page 241 and 242:
224Beata S Javorcikices, thus benef
Page 243 and 244:
226Beata S Javorcikfor plants which
Page 245 and 246:
228Beata S JavorcikAs the majority
Page 247 and 248:
230Beata S Javorcik5. DOES FDI LEAD
Page 249 and 250:
232Beata S Javorcikthough they do n
Page 251 and 252:
234Beata S Javorcik7. FUTURE RESEAR
Page 253 and 254:
236Beata S JavorcikMarkusen, James
Page 255 and 256:
238Chad P Bownthese theories has on
Page 257 and 258:
240Chad P Bownicy changes affect th
Page 259 and 260:
242Chad P Bownis, the policy-imposi
Page 261 and 262:
244Chad P Bownsignificant distortio
Page 263 and 264: 246Chad P Bownaccession period led
Page 265 and 266: 248Chad P Bown2002-03. 16 However,
Page 267 and 268: 250Chad P Bowntive adjustment impac
Page 270: PART CFACTORS THATAFFECT TRADE
Page 273 and 274: 256David Hummelsative advantage for
Page 275 and 276: 258David Hummelsprices shift demand
Page 277 and 278: 260David HummelsThe second form of
Page 279 and 280: 262David Hummelsdogenous to how pro
Page 282 and 283: 17The Duration of Trade Relationshi
Page 284 and 285: The Duration of Trade Relationships
Page 300 and 301: 18Openness and Export Dynamics:New
Page 302 and 303: Openness and Export Dynamics: New r
Page 310 and 311: 19Market Penetration Costs andInter
Page 312 and 313: Market Penetration Cost and Interna
Page 320 and 321: 20Taking Advantage of Trade:The rol
Page 322 and 323: Taking Advantage of Trade: The role
Page 332 and 333: 21Credit Constraints and the Adjust
Page 334 and 335: Credit Constraints and the Adjustme
Page 346: Credit Constraints and the Adjustme
Page 349 and 350: 332Miet Maertens and Jo Swinnenmeas
Page 351 and 352: 334Miet Maertens and Jo Swinnenverg
Page 353 and 354: 336Miet Maertens and Jo Swinnenacti
Page 355 and 356: 338Miet Maertens and Jo Swinnenfirm
Page 357 and 358: 340Miet Maertens and Jo SwinnenBIBL
Page 359 and 360: 342Miet Maertens and Jo SwinnenRear
Page 362 and 363: 23Notes on American Adjustment Poli
Page 364 and 365:
Notes on American Adjustment Polici
Page 366 and 367:
Page 368 and 369:
Page 370 and 371:
Page 372 and 373:
Page 374 and 375:
Page 376:
Page 379 and 380:
362Johan F M Swinnen and Kristine V
Page 381 and 382:
Page 383 and 384:
Page 385 and 386:
Page 387 and 388:
Page 389 and 390:
Page 391 and 392:
Page 393 and 394:
Page 395 and 396:
Page 397 and 398:
Page 399:
This book summarizes the state of k
show all

Trade Adjustment Costs in Developing Countries: - World Bank ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?