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We explore how the competitive pressure of imports affects productivity, at the firm level. There are two conflicting … effects of import-competition: the pro-competitive effect fosters productivity, while the direct effect hinders it. The pro … productivity gap, the firm shuts down. Here, a temporary tariff sways the firm to fight, and ensures survival, which is welfare …
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This paper studies the importance of incentives as a determinant of international trade flows. We argue that barter, countertrade and foreign direct investment can be seen as efficient institutions that mitigate contractual hazards which arise in technology trade, marketing and imperfect capital...
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