Theories of Heterogeneous Firms and Trade
AbstractThis article reviews the recent theoretical literature on heterogeneous firms and trade, which emphasizes firm selection into international markets and reallocations of resources across firms. We discuss the empirical challenges that motivated this research and its relationship to traditional trade theories. We examine the implications of firm heterogeneity for comparative advantage, market size, aggregate trade, the welfare gains from trade, and the relationship between trade and income distribution. Although a number of studies examine the endogenous response of firm productivity to trade liberalization, modeling internal firm organization and the origins of firm heterogeneity remain interesting areas of ongoing research.
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Bibliographic InfoArticle provided by Annual Reviews in its journal Annual Review of Economics.
Volume (Year): 3 (2011)
Issue (Month): 1 (09)
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Other versions of this item:
- Stephen J. Redding, 2010. "Theories of Heterogeneous Firms and Trade," NBER Working Papers 16562, National Bureau of Economic Research, Inc.
- Redding, Stephen J., 2010. "Theories of Heterogeneous Firms and Trade," CEPR Discussion Papers 7961, C.E.P.R. Discussion Papers.
- Stephen Redding, 2010. "Theories of Heterogeneous Firms and Trade," CEP Discussion Papers dp0994, Centre for Economic Performance, LSE.
- F10 - International Economics - - Trade - - - General
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
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