Most microeconometric studies available for LAC have focused on measuring the direct impact of trade on plant productivity leaving aside other effects that arise through the market selection process. Additionally, most studies have focused on tariff barriers as the only obstacle to international...

An increasing body of evidence indicates that an important share of aggregate productivity growth, in both developed and developing countries, arises from the reallocation of resources across plants of different productivity levels. New trade models with heterogeneous firms (Bernard et al., 2003;...

Recent trade models with heterogeneous firms (Bernard et al., 2003 and Melitz, 2003) show how lower trade costs can spur aggregate productivity by forcing lower productivity firms out of the market, cutting off the lower tail of the productivity distribution. In this paper we find significant...