This paper shows that the result of Ju and Krishna [Ju, J., Krishna, K., 2002. Regulations, Regime Switches and Non-Monotonicity when Non-Compliance is an Option: An Application to Content Protection and Preference. Economic Letters 77, 315-321, Ju, J., Krishna, K., 2005. Firm Behavior and Market Access in a Free Trade Area with Rules of Origin. Canadian Journal of Economics 38 (1), 290-308], i.e., the non-monotonicity in the comparative statics across regimes, disappears, if exporters differ in their productivities, which provides very different predictions about the results of policy changes.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics