Trade liberalization and heterogeneous firms’ adjustments: evidence from India

Autor: Maria Bas, Ivan Ledezma
Přispěvatelé: Centre d'économie de la Sorbonne (CES), Université Paris 1 Panthéon-Sorbonne (UP1)-Centre National de la Recherche Scientifique (CNRS), Laboratoire d'Economie de Dijon [Dijon] (LEDi), Université de Bourgogne (UB)-Université Bourgogne Franche-Comté [COMUE] (UBFC)
Jazyk: angličtina
Rok vydání: 2020
Předmět:
Firm-level data
Firms’ domestic sales and capital accumulation
05 social sciences
1. No poverty
Developing country
Tariff
ComputingMilieux_LEGALASPECTSOFCOMPUTING
Capital good
International economics
Trade liberalization
[SHS.ECO]Humanities and Social Sciences/Economics and Finance
Domestic market
Heterogeneous firms
Capital accumulation
8. Economic growth
0502 economics and business
European integration
JEL: F - International Economics/F.F1 - Trade/F.F1.F13 - Trade Policy • International Trade Organizations
Business
050207 economics
JEL: F - International Economics/F.F1 - Trade/F.F1.F12 - Models of Trade with Imperfect Competition and Scale Economies • Fragmentation
General Economics
Econometrics and Finance
Free trade
JEL: F - International Economics/F.F1 - Trade/F.F1.F10 - General
050205 econometrics
Zdroj: Review of World Economics
Review of World Economics, Springer Verlag, 2020, 156 (2), pp.407-441. ⟨10.1007/s10290-019-00366-x⟩
ISSN: 1610-2878
1610-2886
DOI: 10.1007/s10290-019-00366-x⟩
Popis: International audience; In a developing country, trade liberalization affects firms’ production choices through different channels: intensification of foreign competition, reductions of production factor costs, and enhanced access to foreign consumers and technology. Using firm-level data from India, we investigate how firms with different characteristics adjust their domestic sales and capital accumulation to output and input tariff changes. Our findings suggest that India’s trade liberalization has heterogeneous effects depending on firms’ export, import, ownership status and financial constraints. Firms serving only the domestic market have experienced a contraction of domestic sales and capital accumulation due to import competition. They were not able to benefit from the access to lower costs imported inputs and capital goods. Exporting and importing firms and foreign affiliates have expanded their sales and capital investments thanks to the reduction of imported inputs and capital goods costs and thereby, they have been able to face foreign competition. Our findings also suggest that credit constraints affect the relationship between trade liberalization and firms’ capital accumulation. These findings are in line with recent models of trade with heterogeneous firms.
Databáze: OpenAIRE
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