This paper builds a tractable partial equilibrium model to help explain the role of trade preferences given to developing countries, as well as the efficacy of various subsidy policies. The model allows for firm level heterogeneity in demand and productivity and lets the mass of firms that enter be endogenous. Trade preferences given by one country have positive spillovers on exports to others in this model. Preferences given by the European Union...
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2015/01/01
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Documento de trabalho sobre pesquisa de políticas
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WPS7156
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1
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1
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2015/01/06
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Disclosed
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Firm heterogeneity and costly trade: a new estimation strategy and policy experiments
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demand shock
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