TY  - JOUR
AU  - Demidova,Svetlana
AU  - Kee,Hiau Looi
AU  - Krishna,Kala
TI  - Do Trade Policy Differences Induce Sorting? Theory and Evidence from Bangladeshi Apparel Exporters
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12725
PY  - 2006
Y2  - December 2006
UR  - http://www.nber.org/papers/w12725
L1  - http://www.nber.org/papers/w12725.pdf
N1  - Author contact info:
Svetlana Demidova
Department of Economics
McMaster University
Canada
E-Mail: demidov@mcmaster.ca

Hiau Looi Kee
The World Bank
Development Research Group - Trade
1818 H Street, NW (MSN MC3-303)
Washington, DC 20433
E-Mail: hlkee@worldbank.org

Kala Krishna
Department of Economics
523 Kern Graduate Building
The Pennsylvania State University
University Park, PA 16802
Tel: 814/865-1106
Fax: 814/863-4775
E-Mail: kmk4@psu.edu
AB  - This paper provides a new heterogeneous firm model for trade where firms differ in their productivity and experience different market demand shocks. The model incorporates variations in trade policy, trade preferences, and the rules of origin needed to obtain them, to reflect real world differences faced by Bangladeshi garment exporters in the US and EU. We estimate firms' productivity using an extension of the Olley Pakes procedure that accounts for the biases arising from both demand shocks and productivity being unobserved. Predictions of the model are then tested non-parametrically and are shown to be supported empirically.
ER  -