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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Gains from trade liberalization with flexible extensive margin adjustment |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of International Economics |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 0022-1996 |
| Volume | 142 |
| Page Range | 103756 |
| Date | 2023 |
| Abstract Text | We propose a sufficient statistic to measure the ex-post welfare gains from trade in CES models featuring any productivity distribution and any pattern of selection into production and exporting. This statistic is based on a single data moment, the change in the market share of continuing domestic producers, and a single structural parameter, the elasticity of substitution between products. We apply our statistic to measure Canada's gains from the Canada-US Free Trade Agreement using data on observed firm selection. We find that welfare gains can substantially deviate from welfare estimates implied by formulas that assume a constant extensive margin trade elasticity. |
| Related URLs | |
| Digital Object Identifier | 10.1016/j.jinteco.2023.103756 |
| Other Identification Number | merlin-id:23960 |
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| Keywords | Economics and econometrics, finance, welfare, firms, selection, extensive margin, sufficient statistic, liberalization |
| Additional Information | Bereits als Working Paper in SSRN No. 3970457 erschienen: https://doi.org/10.2139/ssrn.3970457. |