Making small firms happy? The heterogeneous effect of trade facilitation measures

Theories of Heterogeneous Firms and Trade

This 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,...

Innovation and Trade with Heterogeneous Firms

This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity and social welfare. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. We identify two effects of trade liberalization on productivity: a direct effect through changes in R&D investment, a...

CHAPTER 1 Heterogeneous Firms and Trade ∗

This chapter reviews the new approach to international trade based on firm heterogeneity in differentiated product markets. This approach explains a variety of features exhibited in disaggregated trade data, including the higher productivity of exporters relative to non-exporters, within-industry reallocations of resources following trade liberalization, and patterns of trade participation acro...

Trade and Prices with Heterogeneous Firms∗

This paper estimates a heterogeneous firms trade model using disaggregate data on export values and prices. Prices contain information about differences in product quality across firms and countries that helps identify key mechanisms in the model. Examining within-country variation in export prices across destination markets, I find that prices behave in a manner inconsistent with the benchmark...

The Costs and Challenges of Trade Facilitation Measures