Theories of heterogeneous firms and trade
AbstractThis paper reviews the recent theoretical literature on heterogeneous firms and trade, whichemphasizes firm selection into international markets and reallocations of resources acrossfirms. We discuss the empirical challenges that motivated this research and its relationship totraditional trade theories. We examine the implications of firm heterogeneity for comparativeadvantage, market size, aggregate trade, the welfare gains from trade, and the relationshipbetween trade and income distribution. While a number of studies examine the endogenousresponse of firm productivity to trade liberalization, modelling internal firm organization andthe origins of firm heterogeneity remain interesting areas of ongoing research.
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Bibliographic InfoPaper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 48908.
Length: 37 pages
Date of creation: Aug 2010
Date of revision:
Heterogeneous firms; international trade; within-industry reallocation; selection into exporting;
Other versions of this item:
- Redding, Stephen J., 2010. "Theories of Heterogeneous Firms and Trade," CEPR Discussion Papers 7961, C.E.P.R. Discussion Papers.
- Stephen J. Redding, 2010. "Theories of Heterogeneous Firms and Trade," NBER Working Papers 16562, National Bureau of Economic Research, Inc.
- Stephen Redding, 2010. "Theories of Heterogeneous Firms and Trade," CEP Discussion Papers dp0994, Centre for Economic Performance, LSE.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
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