Theories of Heterogeneous Firms and Trade

Stephen Redding

No 7961, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper 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. While 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: Heterogeneous firms; International trade; Selection into exporting; Within-industry reallocation (search for similar items in EconPapers)
JEL-codes: F12 F16 L22 (search for similar items in EconPapers)
Date: 2010-08
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Citations: View citations in EconPapers (43)

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Related works:
Journal Article: Theories of Heterogeneous Firms and Trade (2011)
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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