Theories of Heterogeneous Firms and Trade

Stephen Redding

Annual Review of Economics, 2011, vol. 3, issue 1, 77-105

Abstract: This article 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, aggregate trade, the welfare gains from trade, and the relationship between trade and income distribution. Although a number of studies examine the endogenous response of firm productivity to trade liberalization, modeling internal firm organization and the origins of firm heterogeneity remain interesting areas of ongoing research.

Keywords: international trade; within-industry reallocation; selection into exporting (search for similar items in EconPapers)
JEL-codes: F10 F12 F16 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (153)

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Related works:
Working Paper: Theories of Heterogeneous Firms and Trade (2010)
Working Paper: Theories of Heterogeneous Firms and Trade (2010)
Working Paper: Theories of heterogeneous firms and trade (2010)
Working Paper: Theories of Heterogeneous Firms and Trade (2010)
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