Productivity and Firm Selection: Quantifying the ‘New’ Gains from Trade

45 Pages Posted: 3 Jun 2012

See all articles by Gregory Corcos

Gregory Corcos

Norwegian School of Economics (NHH) - Department of Economics

Massimo Del Gatto

CRENOS - Centre for North South Economic Research; 'Gabriele d'Annunzio' University of Chieti-Pescara - Faculty of Economics

Giordano Mion

University of Sussex - Department of Economics; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Gianmarco I.P. Ottaviano

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation

Date Written: June 2012

Abstract

We discuss how standard computable equilibrium models of trade policy can be enriched with selection effects. This is achieved by estimating and simulating a partial equilibrium model that accounts for a number of real world effects of trade liberalisation: richer availability of product varieties; tougher competition and weaker market power of firms; better exploitation of economies of scale; and, of course, efficiency gains via firms selection. The model is estimated on EU data and then simulated in counterfactual scenarios. Gains from trade are much larger in the presence of selection effects with substantial variability across countries and sectors.

Suggested Citation

Corcos, Gregory and Del Gatto, Massimo and Mion, Giordano and Ottaviano, Gianmarco I.P., Productivity and Firm Selection: Quantifying the ‘New’ Gains from Trade (June 2012). The Economic Journal, Vol. 122, Issue 561, pp. 754-798, 2012. Available at SSRN: https://ssrn.com/abstract=2073104 or http://dx.doi.org/10.1111/j.1468-0297.2011.02487.x

Gregory Corcos (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

Massimo Del Gatto

CRENOS - Centre for North South Economic Research ( email )

Cagliari
Italy

'Gabriele d'Annunzio' University of Chieti-Pescara - Faculty of Economics ( email )

Faculty of Economics - Department of Economics
Viale Pindaro, 42
Pescara, 65127
Italy

Giordano Mion

University of Sussex - Department of Economics ( email )

Falmer, Brighton BN1 9SL
United Kingdom

HOME PAGE: http://sites.google.com/site/giordanomionhp/

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Gianmarco I.P. Ottaviano

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation ( email )

Via Gobbi 5
Milan, 20136
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1
Abstract Views
347
PlumX Metrics