Do Trade Policy Differences Induce Sorting? Theory and Evidence from Bangladeshi Apparel Exporters

62 Pages Posted: 21 Nov 2006

See all articles by Svetlana A. Demidova

Svetlana A. Demidova

Department of Economics, McMaster University

Hiau Looi Kee

World Bank - Development Research Group (DECRG)

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: November 2006

Abstract

This paper provides new testable predictions of heterogeneous firm (HF) models for trade. Variations in trade policy, trade preferences, and the rules of origin (ROOs) needed to obtain them are incorporated into the model and some analytical means of dealing with the resulting asymmetries are developed. The policy differences modelled correspond to differences across products and destination markets for Bangladeshi garment exports to the US and EU. These turn out to provide an interesting natural experiment. Predictions of the model for the distribitions of TFP of various groups of firms are tested non-parametrically and are supported by the data.

Keywords: Rules of origin, firm heterogeneity, export performance and productivity

JEL Classification: F12, F13

Suggested Citation

Demidova, Svetlana A. and Kee, Hiau Looi and Krishna, Kala, Do Trade Policy Differences Induce Sorting? Theory and Evidence from Bangladeshi Apparel Exporters (November 2006). Available at SSRN: https://ssrn.com/abstract=946184 or http://dx.doi.org/10.2139/ssrn.946184

Svetlana A. Demidova (Contact Author)

Department of Economics, McMaster University ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4
Canada

Hiau Looi Kee

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-4155 (Phone)
202-522-1159 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/hkee

Kala Krishna

Pennsylvania State University - Department of Economics ( email )

523 Kern Graduate Building
University Park, PA 16802-3306
United States
814-865-1106 (Phone)
814-863-4775 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
41
Abstract Views
628
PlumX Metrics