Multi-Product Firms and Trade Liberalization

Andrew Bernard, Stephen Redding and Peter Schott

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: This paper develops a general equilibrium model of international trade that features selection across firms, products and countries. Firms’ export decisions depend on a combination of firm “productivity” and firm-product-country “consumer tastes”, both of which are stochastic and unknown prior to the payment of a sunk cost of entry. Higher-productivity firms export a wider range of products to a larger set of countries than lower-productivity firms. Trade liberalization induces endogenous reallocations of resources that foster productivity growth both within and across firms. Empirically, we find key implications of the model to be consistent with U.S. trade data.

Keywords: heterogeneous firms; endogenous product scope; love of variety; core competency (search for similar items in EconPapers)
JEL-codes: F12 F13 L11 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2009-08
New Economics Papers: this item is included in nep-bec, nep-int and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

Downloads: (external link)
https://www2.census.gov/ces/wp/2009/CES-WP-09-21.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: Multiproduct Firms and Trade Liberalization (2011)
Working Paper: Multi-product Firms and Trade Liberalization (2007)
Working Paper: Multi-Product Firms and Trade Liberalization (2006)
Working Paper: Multi-product firms and trade liberalization (2006)
Working Paper: Multi-Product Firms and Trade Liberalization (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:09-21

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