TY  - JOUR
AU  - Baldwin,Richard E.
AU  - Forslid,Rikard
TI  - Trade Liberalization with Heterogenous Firms
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12192
PY  - 2006
Y2  - May 2006
UR  - http://www.nber.org/papers/w12192
L1  - http://www.nber.org/papers/w12192.pdf
N1  - Author contact info:
Richard Baldwin
Cigale 2
1010 Lausanne
SWITZERLAND
Tel: 41-22-908-5900
E-Mail: rbaldwin@cepr.org

Rikard Forslid
Stockholm University
E-Mail: Rikard.Forslid@ne.su.se
AB  - This paper examines the impact of trade liberalization with heterogeneous firms using the Melitz (2003) model. We find a number of novel results and effects including a Stolper-Samuelson like result and several results related to the volume of trade, which are empirically testable. We also find what might be called an anti-variety effect as the result of trade liberalization. This resonates with the often voiced criticism from antiglobalists that globalization leads the world to become  more homogenous by eliminating local specialities. Nevertheless, we find that trade liberalization always leads to welfare gains in the model.
ER  -