This paper examines the effects of trade openness on the optimal incentives firms provide to their managers (and hence firm-level productivity) in the new heterogeneous-firm trade framework. Export market selection and firm heterogeneity are shown to be the key determinants of firm owners’ optimal choices of the incentive contracts, which affect the cost-reduction efforts of their managers. I s...

This paper investigates equilibria in a labor market where heterogeneous …rms post wage/tenure contracts and risk-averse workers, both employed and unemployed, search for new job opportunities. Di¤erent …rms, even those with the same productivity, typically o¤er di¤erent contracts. Equilibrium …nds workers never quit from higher productivity …rms to lower productivity …rms, but turnover is ine¢...

We evaluate the impact of firm-specific export subsidies on exports in Colombia. Using a two-stage Heckman selection procedure, we obtain firm-specific predicted subsidy amounts that can be explained by the characteristics that determine the firms’ eligibility for the government support and its amount. Drawing on the accounts of the discretionary allocation of subsidies in developing countries,...

International trade is dominated by a small number of very large firms. Models with heterogeneous firms have been developed to study the causes and consequences this observation. The canonical model shows that leads between-firm reallocations selection: it shifts employment towards best attributes forces marginal exit. also illustrates role heterogeneity, its various sources, in explaining volu...