The Theoretical Equivalent of Empirically Measurable Exporter Productivity when Firms are Heterogeneous
The marginal costs based representation of firm productivity in the Melitz [Melitz, M.J., 2003. The impact of trade on intra-industry reallocations and aggregate industry productiv- ity. Econometrica 71 (6), 1695-1725] model, predicts positive exporter productivity premia. We show that this prediction is reversible when computing the theoretical equivalent of the empirically measurable productivity expression (value added per worker) in the model. The paper discusses implications of this finding for empirical research.
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Open Access publications
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