Andrew Bernard (Institute for Fiscal Studies and Dartmouth University) J. Bradford Jensen Peter Schott (Institute for Fiscal Studies and Yale University)
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This paper examines the response of industries and firms to changes in trade costs. Several new firm-level models of international trade with heterogeneous firms predict that industry productivity will rise as trade costs fall due to the reallocation of activity across plants within an industry. Using disaggregated U.S. import data, we create a new measure of trade costs over time and industries. As the models predict, productivity growth is faster in industries with falling trade costs. We also find evidence supporting the major hypotheses of the heterogenous- firm models. Plants in industries with falling trade costs are more likely to die or become exporters. Existing exporters increase their shipments abroad. The results do not apply equally across all sectors but are strongest for industries most likely to be producing horizontally-differentiated tradeable goods.
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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number
W03/10.
Length: 33 pp Date of creation: Jun 2003 Date of revision: Handle: RePEc:ifs:ifsewp:03/10
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
J Bradford Jensen & Andrew B Bernard, 2001.
"Why Some Firms Export,"
Working Papers
01-05, Center for Economic Studies, U.S. Census Bureau.
[Downloadable!]
Other versions:
Andrew B. Bernard & J. Bradford Jensen, 2001.
"Why Some Firms Export,"
NBER Working Papers
8349, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.) This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.