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Barriers to Entry and Development

Arilton Teixeira () and Berthold Herrendorf

No 22, Fucape Working Papers from Fucape Business School

Abstract: We ask whether barriers to entry are a quantitatively important reason for the income gap between developing countries and the U.S. We develop a tractable general equilibrium model that captures the effects of barriers to entry and the other main classes of distortion 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 between developing countries and the U.S.

Keywords: Barriers to entry; monopoly power; rent extraction; total factor productivity. (search for similar items in EconPapers)
Pages: 54
Date: 2009-12
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Published in Fucape Working Papers Dezembro 2010

Downloads: (external link) Primeira Versão, 2009 (application/pdf)
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