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Please use this identifier to cite or link to this item:
http://hdl.handle.net/1814/7691
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| Title: | Technology Adoption and the Selection Effect of Trade |
| Authors: | NAVAS-RUIZ, Antonio
SALA, Davide |
| Keywords: | International Trade
Technology Adoption
Productivity
F12
F15
L11
O33
O47 |
| Issue Date: | 2007 |
| Publisher: | European University Institute |
| Series/Report no.: | EUI ECO
2007/58 |
| Abstract: | The reallocation of output across plants and the productivity growth at individual plants
are both important sources of productivity growth at the industry level. Recent evidence
has shown that trade liberalization is related to both effects. While a trade model with firm
heterogeneity can account for the first effect, it can not explain the second effect. We add to
this model the option for firms to costly adopt more productive technologies and show that
plant productivity actually rises in response to lower trade costs. Following trade liberalization,
selection into exporting raises the market share only for some exporters. Therefore, a greater
scale of operation amplifies their return from costly productivity-enhancement investments and
leads a greater proportion of them to implement a more innovative technology. |
| URI: | http://hdl.handle.net/1814/7691 |
| ISSN: | 1725-6704 |
| Appears in Collections: | ECO Working Papers
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