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 in its series Open Access publications from London School of Economics and Political Science with number CEPDP0994.
Date of creation: Aug 2010
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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.
- 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.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- 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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