Template-Type: ReDIF-Paper 1.0


Author-Name: Christian Bauer
Author-X-Name-First: Christian
Author-X-Name-Last: Bauer

Title: Trade, Productivity and semi-endogenous Growth
	
Abstract: We investigate the impact of incremental trade liberalization in a dynamic model of
endogenous growth with heterogeneous firms and costly trade. Growth originates from
horizontal specialization and the steady state productivity growth rate is positive. Innovations
require costly R&D and are conducted by profit-seeking researchers. Including
physical capital as a factor of production, we find that after appropriate adjustments in
the production structure, previous results on the reallocation of resources and the selection
of firms following trade liberalization continue to hold. We show, however, that unlike
in the Melitz (2003) model, the reallocation effect does not work through increases in the
factor price in production.
Length:  71 pages
Creation-Date:  2008-06
File-URL: http://www.bgpe.de/texte/DP/056_bauer.pdf
File-Format: Application/pdf
File-Function: First version, 2008
Number: 056
Classification-JEL: F12, F13, O31, O41
Keywords: Productivity, entry costs, heterogeneous firms, trade Liberalization
Handle: RePEc:bav:wpaper:056_bauer