Tariffs, Trade and Productivity: A Quantitative Evaluation of Heterogeneous Firm Models

Cu�at, Alejandro; Breinlich, Holger; Cunat, Alejandro

Abstract

© 2014 Royal Economic Society We examine the quantitative predictions of heterogeneous firm in the context of the Canada–US Free Trade Agreement (CUSFTA) of 1989. We compute predicted increases in trade flows and measured productivity and compare them to the post-CUSFTA increases observed in the data. Most models predict increases in measured productivity that are too low by an order of magnitude relative to predicted increases in trade flows. A multi-product firm extension that allows for within-firm productivity increases has the potential to reconcile model predictions with the data.

Citation

Cuñat, A., Breinlich, H., & Cunat, A. (2016). Tariffs, Trade and Productivity: A Quantitative Evaluation of Heterogeneous Firm Models. Economic Journal, 126(595), 1660-1702. https://doi.org/10.1111/ecoj.12218

• Journal Article Type: Article
• Acceptance Date: Sep 12, 2014
• Online Publication Date: Jul 14, 2015
• Publication Date: Sep 1, 2016
• Deposit Date: Sep 24, 2015
• Publicly Available Date: Sep 24, 2015
• Journal: The Economic Journal
• Print ISSN: 0013-0133
• Electronic ISSN: 1468-0297
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 126
• Issue: 595
• Pages: 1660-1702
• DOI: https://doi.org/10.1111/ecoj.12218
• Public URL: https://nottingham-repository.worktribe.com/output/757018
• Publisher URL: https://academic.oup.com/ej/article/126/595/1660/5077864
• Additional Information: This is the peer reviewed version of the following article: Breinlich, H. Tariffs, trade and productivity: a quantitative evaluation of heterogeneous firm models, Economic Journal, 2015, which has been published in final form at http://dx.doi.org/10.1111/ecoj.12218. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.