Trade Reforms in a Global Competition Model: The Case of Chile

32 Pages Posted: 27 Dec 2005

See all articles by Luca David Opromolla

Luca David Opromolla

Bank of Portugal; CEPR; UECE - Research Unit on Complexity in Economics

Alfonso A. Irarrazabal

New York University (NYU) - Department of Economics

Date Written: May 19, 2006

Abstract

We use a global competition model of international trade with heterogeneous firms to evaluate the impact of trade reforms that occurred in Chile at the end of the 70s. We compare the predictions of the calibrated model in terms of productivity, plant turnover, job and trade flows with what occurred in reality using a comprehensive plant-level panel dataset for the manufacturing sector. The model explains several effects of liberalization reforms on industry performance. In contrast to the previous studies we use a general equilibrium approach that allows fully quantifying and identifying the trade liberalization effects on the tradeable and nontradeable sectors. We proceed by performing a counterfactual experiment aimed at exploring the impact of preferential trade agreements negotiated by Chile in recent years with the EU and NAFTA.

Keywords: Trade Reform, Heterogeneous Firms, Productivity, Intermediate Goods, Preferential Trade Agreements

JEL Classification: F11, F17, L11, O24

Suggested Citation

Opromolla, Luca David and Irarrazabal, Alfonso A., Trade Reforms in a Global Competition Model: The Case of Chile (May 19, 2006). Available at SSRN: https://ssrn.com/abstract=871517 or http://dx.doi.org/10.2139/ssrn.871517

Luca David Opromolla (Contact Author)

Bank of Portugal ( email )

Rua Francisco Ribeiro 2
Lisbon, 1150-165
Portugal

CEPR ( email )

London
United Kingdom

UECE - Research Unit on Complexity in Economics ( email )

ISEG/UTL Rua Miguel Lupi 20
Lisboa, 1249-078
Portugal

Alfonso A. Irarrazabal

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
148
Abstract Views
1,089
Rank
356,899
PlumX Metrics