Barriers to entry and development

Berthold Herrendorf, Arilton Teixeira

Research output: Contribution to journalArticle

19 Scopus citations

Abstract

We ask whether barriers to entry are a quantitatively important reason for the income gap between developing countries and the United States. We develop a tractable general equilibrium model that captures the effects of barriers to entry and the other main distortions typically considered in the development literature. We carry our model to the data and ask it to match the main development facts from the Penn World Table. We find that this requires large barriers to entry in developing countries, which account for about half of the income gap with the United States.

Original languageEnglish (US)
Pages (from-to)573-602
Number of pages30
JournalInternational Economic Review
Volume52
Issue number2
DOIs
StatePublished - May 1 2011

ASJC Scopus subject areas

  • Economics and Econometrics

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