This paper focuses on the necessary conditions required in order to exploit the substitution effect which arises when there is a shift in demand induced by import quotas under imperfect competition. The protective policy succeeds if the substitution effect shifts in favor of goods produced by...

This paper provides an empirical evidence of the impact of foreign trade on the sectorial productivity for the Tunisian manufacturer sector. The objective is to show that the insufficiency of the traditional theory in the explanation of the impact of the international trade on the labour market...

In recent years empirical studies offer clear evidence on the increasing importance of intra-industry trade in presence of vertically differentiated products. These are goods that, within the same industry, are distinguished by different quality levels. In the new trade theory and in the...

We develop a model of international trade with two sources of firm heterogeneity: "productivity" and "caliber". Productivity is modeled as is standard in the literature. Caliber is the ability to produce quality using few fixed inputs. While there is no quality restriction to sell domestically,...

The HMR model extends the classical gravity model of trade to correct for the large number of zeros in the world trade matrix (export selection) and for the unobservable fraction of exporting fi�rms (extensive margin). They �find that, while omission of both of these corrections result in...

Following Melitz (2003)'s seminal paper, several theoretical and empirical studies have shown that only the subset of most productive firms export. While other studies provide evidence on a positive effect of an increase in imported inputs on firms' productivity, the link between imported...

This paper addresses the question of why the price of nontradables relative to tradables is positively correlated with income per worker. I construct a two-sector model in which agents differ with respect to managerial ability. Agents sort themselves by choosing to become a worker, a manager in...

This paper examines inter-country variations and growing volume of Intra-industry trade for thirty rapidly industrializing Asian and Latin American countries in the 1990s. With rapid industrialisation, intra-industry trade in manufactured products have increased substantially. We find that...

The link between regional integration and intra-industry trade (IIT) has been under scrutiny since it has been first suggested by the European integration process. However, the lack of reliable data and the difficulty to find a robust model for IIT made this relationship difficult to prove. This...