"There is a growing literature that investigates the effect of trade liberalization on productivity. Nearly all such studies assume that trade policy is determined independently of productivity, hence it is exogenous. The author shows that this assumption is not valid in general, both...

"The authors study how the effect of trade openness on economic growth depends on complementary reforms that help a country take advantage of international competition. This issue is illustrated with a simple Harris-Todaro model where output gains after trade liberalization depend on the degree...

How firms react to a given shock may depend on the degree to which rivals are present and on whether potentially viable entrants to that market exist. A preferred supplier market presence and threat of entry lessen a nonmember country's price reaction to most-favored-nation trade liberalization...