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-competitive effect dominates in the steady-state,...

The empirical literature on the effect of trade agreements has reached a consensus that WTO effects are insignificant or modest at best especially compared to the robust and strong positive effect of preferential trade agreements (PTAs) on bilateral trade (Rose, 2004; Eicher and Henn, 2011; Baier and...