TY - JOUR
T1 - International trade and industrial dynamics
AU - Ederington, Josh
AU - McCalman, Phillip
PY - 2009/8
Y1 - 2009/8
N2 - In this article, industrial evolution is driven by endogenous technology choices of firms, generating a rich environment that includes the possibility of a dramatic shakeout. The likelihood, magnitude, and timing of this shakeout are characterized and depend not only on the size of an innovation but also on cost structure. In this setting, trade liberalization reduces the likelihood of a shakeout, resulting in more stable industrial structures. However, when shakeouts arise in global markets, the distribution of exits can vary widely across countries. Furthermore, conditions exist where a shakeout occurs in a closed economy but not in an open economy.
AB - In this article, industrial evolution is driven by endogenous technology choices of firms, generating a rich environment that includes the possibility of a dramatic shakeout. The likelihood, magnitude, and timing of this shakeout are characterized and depend not only on the size of an innovation but also on cost structure. In this setting, trade liberalization reduces the likelihood of a shakeout, resulting in more stable industrial structures. However, when shakeouts arise in global markets, the distribution of exits can vary widely across countries. Furthermore, conditions exist where a shakeout occurs in a closed economy but not in an open economy.
UR - http://www.scopus.com/inward/record.url?scp=67650931072&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=67650931072&partnerID=8YFLogxK
U2 - 10.1111/j.1468-2354.2009.00555.x
DO - 10.1111/j.1468-2354.2009.00555.x
M3 - Article
AN - SCOPUS:67650931072
SN - 0020-6598
VL - 50
SP - 961
EP - 989
JO - International Economic Review
JF - International Economic Review
IS - 3
ER -