Trade liberalization in Ukraine boosts industry productivity through selection and within-firm effects.
Trade liberalization in Ukraine led to increased industry productivity through two main ways: firms improved productivity by using better inputs, and less productive firms were eliminated from the industry. The study used a new method to analyze changes in productivity distribution within industries over time. By examining manufacturing and services firms in Ukraine from 2001 to 2009, the researchers found that changes in productivity distribution were influenced by both within-firm improvements and the elimination of less productive firms. This suggests that both selection and within-firm effects play a role in boosting industry productivity after trade liberalization.