Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
The authors study the consequences and optimality of alternative speeds of trade liberalization when investment (restructuring) activities help firms learn their true level of efficiency and determine survival prospects. In contrast to the existing literature, they find that a gradual trade reform might be preferred when authorities are more preoccupied with the longer term. The authors also show that costs of business closures have an ambiguous impact on the optimal pace of liberalization. Copyright 1997 by Royal Economic Society.