The Theoretical Equivalent of Empirically Measurable Exporter Productivity when Firms are Heterogeneous

Philipp Schröder and Allan Sørensen

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: The marginal costs based representation of firm productivity in the Melitz [Melitz, M.J., 2003. The impact of trade on intra-industry reallocations and aggregate industry productiv- ity. Econometrica 71 (6), 1695-1725] model, predicts positive exporter productivity premia. We show that this prediction is reversible when computing the theoretical equivalent of the empirically measurable productivity expression (value added per worker) in the model. The paper discusses implications of this finding for empirical research.

Keywords: Intra-industry trade; firm productivity; heterogeneous firms (search for similar items in EconPapers)
JEL-codes: F12 F13 F15 (search for similar items in EconPapers)
Pages: 9
Date: 2010
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