Reto Föllmi
Title
Prof. Dr.
Last Name
Föllmi
First name
Reto
Email
reto.foellmi@unisg.ch
ORCID
Phone
+41 71 224 2269
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Item type:Publication, Weiter Weg zum Liberalisierungserfolg bei imperfekten Kreditmärkten(2017); Oechslin, ManuelType:journal articleJournal:Die Volkswirtschaft. Plattform für WirtschaftspolitikIssue:11 / 2017 - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Market Imperfections, Wealth Inequality, and the Distribution of Trade GainsGlobalization increasingly involves less-developed countries (LDCs), i.e., economies which usually suffer from severe imperfections in their financial systems. Taking these imperfections seriously, we analyze how credit frictions affect the distributive impact of trade liberalizations. We find that free trade significantly widens income differences among firm owners in LDCs: While wealthy entrepreneurs are better off, relatively poor business people lose. Intuitively, with integrated markets, profit margins shrink - which makes access to credit particularly difficult for the least-affluent agents. Richer entrepreneurs, by contrast, win because they can take advantage of new export opportunities. Our findings resonate well with a number of empirical regularities, in particular with the observation that some liberalizing LDCs have observed a surge in top-income shares.Type:journal articleJournal:Journal of International EconomicsVolume:81Issue:1Scopus© Citations 39