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Heterogeneous Fixed Export Costs and the Division of Labor

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  • Shintaku, Koji

Abstract

We theoretically investigates that how firms decide to exports and the extent of the division of labor under heterogeneous fixed export costs. In the equilibrium, exporters and non-exporters coexists and all exporters behave as borderline firms. Exporters promote the division of labor more strongly than non-exporters. A decrease in trade costs raises the cut off export fixed costs. It expands firm size and promotes the division of labor of exporters, while it shrinks firm size and make non-exporters refrain from the division of labor. These links between the cut off fixed export costs and the division of labor of exporters and non-exporters bring a new insight for the research line of trade and heterogeneous fixed export costs

Suggested Citation

  • Shintaku, Koji, 2015. "Heterogeneous Fixed Export Costs and the Division of Labor," MPRA Paper 64655, University Library of Munich, Germany, revised 25 May 2015.
    • Handle: RePEc:pra:mprapa:64655
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    References listed on IDEAS

    as
    1. Chaney, Thomas & Ossa, Ralph, 2013. "Market size, division of labor, and firm productivity," Journal of International Economics, Elsevier, vol. 90(1), pages 177-180.
    2. Schmitt, Nicolas & Yu, Zhihao, 2001. "Economies of scale and the volume of intra-industry trade," Economics Letters, Elsevier, vol. 74(1), pages 127-132, December.
    3. Jørgensen, Jan G. & Schröder, Philipp J.H., 2008. "Fixed export cost heterogeneity, trade and welfare," European Economic Review, Elsevier, vol. 52(7), pages 1256-1274, October.
    4. Shintaku, Koji, 2015. "Change in Fixed Costs and the Division of Labor within Firms through Labor Reallocation," MPRA Paper 62644, University Library of Munich, Germany.
    5. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    6. repec:spo:wpmain:info:hdl:2441/312fvs95ub8ct80ng4em8fjifb is not listed on IDEAS
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    Keywords

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    JEL classification:

    • F1 - International Economics - - Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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