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A simple theory of trade, finance, and firm dynamics
Felbermayr, Gabriel; Spiegel, Gilbert - 2012
We propose a stylized monopolistic competition model of international trade where firms differ with respect to the expected economic lifetime of their innovations. Upon entry, they receive a commonly observed signal which is updated over time. Jointly with partial irreversibility of investment,...
Persistent link: https://www.econbiz.de/10009571208
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A unified model of international business cycles and trade
Bhattarai, Saroj; Kucheryavyy, Konstantin - 2020
We present a unified dynamic framework to study the interconnections between international trade and business cycle models. We prove an aggregate equivalence between a competitive, representative firm model that has aggregate production externalities and dynamic trade models that feature...
Persistent link: https://www.econbiz.de/10012171705
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Aggregate properties of open economy models with expanding varieties
Bhattarai, Saroj; Kucheryavyy, Konstantin - 2022
We present a unified dynamic framework to study the interconnections between international trade and business cycle models. We prove an aggregate equivalence between a competitive, representative firm model that has aggregate production externalities and dynamic trade models that feature...
Persistent link: https://www.econbiz.de/10013332104
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Exit dynamics of start-up firms : does profit matter?
Golombek, Rolf; Raknerud, Arvid - 2015
We estimate by means of indirect inference a structural economic model where firms’ exit and investment decisions are the solution to a discrete-continuous dynamic programming problem. In the model the exit probability depends on the current capital stock and a measure of short-run...
Persistent link: https://www.econbiz.de/10010474825
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Employment protection : the case of limited enforceability
Baumann, Florian (contributor) - 2008
This paper shows that the effects of employment protection critically depend on its enforcement. For this purpose, we capture evasion of employment protection via market exit in a setting of monopolistic competition. We find that the number of firms entering the market depends on firing costs...
Persistent link: https://www.econbiz.de/10003730300
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Market size and number of firms with new technology
Marjit, Sugata; Dastidar, Krishnendu Ghosh; Das, … - 2022
In this paper, unlike the conventional wisdom, we demonstrate that the relationship between the size of the market and number of firms would be non-monotonic. While moderate rise in the size would force the local firms to exit and only the foreign firm rules, substantial rise in the size would...
Persistent link: https://www.econbiz.de/10013365373
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Trade and development in a labor surplus economy
Barbier, Edward (contributor); Rauscher, Michael (contributor) - 2005
This paper looks at a model in which two countries trade agricultural and manufactured commodities. The manufactured-goods sector produces with increasing returns to scale under conditions of monopolistic competition. It is shown that an increase in land endowment (or an increase in agricultural...
Persistent link: https://www.econbiz.de/10003109954
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Price equalization does not imply free trade
Mutreja, Piyusha; Ravikumar, B.; Riezman, Raymond Glenn; … - 2013
In this paper we show that price equalization alone is not sufficient to determine the barriers to international trade. There are many barrier combinations that deliver price equalization, but each combination implies a different volume of trade. We demonstrate this first theoretically in a...
Persistent link: https://www.econbiz.de/10009700288
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Market size and TFP in new new trade theory
Felbermayr, Gabriel; Jung, Benjamin - 2015
Recent trade theory in the Krugman (1980) tradition predicts that countries with larger market size enjoy higher levels … market size and TFP. We argue that models with heterogeneous firms and selection help to reconcile theory and data. While … firms. To reconcile theory with data, we show that a lower degree of external economies of scale (EoS) is needed than what …
Persistent link: https://www.econbiz.de/10011375682
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Monopolistic competition, optimum product diversity, and international trade : the role of factor endowment and factor intensities
Marjit, Sugata; Mandal, Biswajit - 2021
In this paper we revisit the influential theory of monopolistic competition and optimum product variety as developed by …
Persistent link: https://www.econbiz.de/10012603195