Trade reforms in transition economies are analyzed in a model of trade and vertical product differentiation. We first show that trade liberalization in transition economies reduces the local firm s output and raises the prices of all variants. Second, we find that neither free trade nor the...

This paper studies whether credit constraints affect the decision of small and medium size enterprises (SMEs) to upgrade the quality of their exported output with respect to the one sold domestically. We use a detailed firm-level data-set on Italian SMEs reporting information on output...