Heterogeneous firm-level responses to trade liberalization: A test using stock price reactions

• 成果类型: Article
• 署名作者: Breinlich, Holger
• 署名单位: University of Essex; University of Essex; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2014.04.002
• 发表日期: 2014
• 页码: 270-285
• 关键词: Heterogeneous firm models; Stock market event studies; Canada-US Free Trade Agreement

摘要

This paper presents novel empirical evidence on key predictions of heterogeneous firm models by examining stock market reactions to the Canada-United States Free Trade Agreement of 1989 (CUSFTA). I derive testable predictions fora class of models based on Melitz (2003). Using the uncertainty surrounding CUSFTA's ratification, I show that the pattern of abnormal returns of Canadian manufacturing firms was strongly consistent with predictions related to export (U.S.) tariff reductions, but less so with predictions related to import (Canadian) tariff reductions. Lower Canadian tariffs did have an effect through the implied reduction in intermediate input tariffs, however. (C) 2014 Elsevier B.V. All rights reserved.