Asymmetric Monotone Comparative Statics for the Industry Compositions

Anders Rosenstand Laugesen ()
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Anders Rosenstand Laugesen: Department of Economics and Business Economics, Aarhus University, Denmark, Postal: 8210 Aarhus V, Denmark

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

Abstract: Within a standard model of international trade with heterogeneous firms and two asymmetric countries, we derive sufficient conditions for monotone comparative statics (MCS) for the industry composition. This model outcome is defined as first-order stochastic dominance shifts in the equilibrium distributions of all activities across active firms. MCS for the industry composition occurs in a country which experiences a decline in its costs of serving the foreign market and meanwhile experiences an increase in its level of competition. In the other country, the industry-level implications are exactly opposite. These clear industry-level results hold while firms respond asymmetrically to the trade shock

Keywords: Complementary Activities; Firm Heterogeneity; Firm-Size Distribution; Exporting; Asymmetries (search for similar items in EconPapers)
JEL-codes: D21 F12 F61 L11 (search for similar items in EconPapers)
Pages: 30
Date: 2015-11-27
New Economics Papers: this item is included in nep-ore
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Citations: View citations in EconPapers (2)

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