Trade Liberalization in a Model with Endogeneous Entrepreneurship

The theme of my theses is investigation of trade liberalization effects on firm’s productivity. Trade liberalization models are very important in condition of globalization, that is why it attracts increasing attention of modern economic science. Although, analyzing trade liberalization effects from microlevel is a relatively new direction of the study, but very prospective. One of the main ideas of these studies is to understand whether firm experiences higher productivity growth by becoming exporter or by being forced to improve in condition of increasing competition. For my thesis I used Melitz and Ottaviano model since it gives highly tractable result and wide range of firm performance measure, as productivity, mark-ups and others. To investigate those effects, I solved monopolistically competitive model with heterogeneous firms. This model based on quasi-linear preferences introduced by Melitz and Ottaviano (2008). The model was solved for Opened and Closed economy. The case of symmetric countries was analyzed implementing number simulation method. During analysis bounded Pareto distribution of productivity was used.