Theories of Heterogeneous Firms and Trade
AbstractThis paper 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. While 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 InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16562.
Date of creation: Dec 2010
Date of revision:
Publication status: published as Stephen J. Redding, 2011. "Theories of Heterogeneous Firms and Trade," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 77-105, 09.
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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Other versions of this item:
- Stephen Redding, 2010. "Theories of Heterogeneous Firms and Trade," CEP Discussion Papers dp0994, Centre for Economic Performance, LSE.
- Redding, Stephen J., 2010. "Theories of Heterogeneous Firms and Trade," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7961, C.E.P.R. Discussion Papers.
- Stephen Redding, 2010. "Theories of heterogeneous firms and trade," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 48908, London School of Economics and Political Science, LSE Library.
- F1 - International Economics - - Trade
- L80 - Industrial Organization - - Industry Studies: Services - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-11 (All new papers)
- NEP-BEC-2010-12-11 (Business Economics)
- NEP-INT-2010-12-11 (International Trade)
- NEP-OPM-2010-12-11 (Open Economy Macroeconomics)
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