TY  - RPRT
        AU  - Pflüger, Michael P.
AU  - Russek, Stephan
        TI  - Trade and Industrial Policies with Heterogeneous Firms: The Role of Country Asymmetries
        PY  - 2010/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5387
        UR  - https://www.iza.org/publications/dp5387
        AB  - This paper explores the role of country asymmetries for trade and industrial policies with heterogeneous firms. Our analysis delivers a number of novel results. First, trade policies, infrastructure policies and industrial policies which improve the business conditions in one country have negative productivity and welfare effects on the trading partner. Second, symmetric trade liberalization is immiserizing for a trading partner whose business conditions are inferior. Third, there are gains from trade even for a country whose monopolistically competitive sector with heterogeneous firms is wiped out by the switch from autarky to trade.
        KW  - business conditions
KW  - industrial policies
KW  - trade policies
KW  - welfare
KW  - firm heterogeneity
        ER  -