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- W2181946653 abstract "This paper is aimed at studying the impact of input trade liberalization on …nal good …rm's competitiveness, aggregate productivity and welfare, by developing a theoretical framework a la Melitz (2003), which incorporates: a) trade in …nal goods/intermediate inputs between similar countries, b) …rm's decisions to import intermediate inputs and to export …nal output. This model shows dierent eects from reducing input taris, according to if all in- termediates are assumed to be imported directly by …nal good …rms -through incurring additional …xed cost -or indirectly -through an e¢ cient wholesale system, without making any further …xed investment. If all foreign intermediates are 'indirectly im- ported', all …nal good …rms uniformly gain in competitiveness from trade liberalization in intermediates, since they are able to substitute the worst domestic inputs with the best foreign ones (gains from input switching). These uniform competitiveness gains will translate entirely into an increase in consumers'welfare without any particular …rm dynamics within …nal good sector. Whereas, if all foreign intermediates are 'di- rectly imported', only the more productive …rms (importers) will be able to use foreign inputs, and therefore enjoy some competitiveness gains from input trade liberalization. Conversely, the other …rms (non-importers) will suer some competitiveness losses, mainly due to a decrease in domestic input varieties available. That would force the least productive …rms to exit the domestic market and the least productive exporters to leave international market, causing some business reallocation towards the more productive …rms (import-export …rms), and consequently some aggregate productivity gains and some …nal variety losses. Nevertheless, consumer's welfare seems to increase again by considering altogether these eects." @default.
- W2181946653 created "2016-06-24" @default.
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- W2181946653 date "2011-01-01" @default.
- W2181946653 modified "2023-09-27" @default.
- W2181946653 title "Trade Liberalization, Intermediate Inputs and Firm Competitiveness: Direct versus Indirect Modes of Import" @default.
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