Affiliation:
1. Yale University, CESifo, and NBER (email: )
2. Georgetown University and CESifo (email: )
3. UC San Diego, CESifo, and NBER (email: )
Abstract
To quantify trade frictions, we examine multiproduct exporters. We build a flexible general-equilibrium model and estimate market entry costs using Brazilian firm-product-destination data under rich demand and market access cost shocks. Our estimates show that additional products farther from a firm’s core competency come at higher production costs, but there are substantive economies of scope in market access costs. Market access costs differ across destinations, falling more rapidly in scope at nearby regions and at destinations with fewer nontariff barriers. We evaluate a counterfactual scenario that harmonizes market access costs across destinations and find global welfare gains similar to eliminating all current tariffs. (JEL D22, F12, F13, F14, O14, O19)
Publisher
American Economic Association
Subject
General Economics, Econometrics and Finance
Cited by
18 articles.
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