Heterogeneous firms and trade

Marc Melitz and Stephen Redding

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper reviews the new approach to international trade based on firm heterogeneity in differentiated product markets. This approach explains a variety of features exhibited in disaggregated trade data, including the higher productivity of exporters relative to non-exporters, within-industry reallocations of resources following trade liberalization, and patterns of trade participation across firms and destination markets. Accounting for these empirical patterns reveals new mechanisms through which the aggregate economy is affected by trade liberalization, including endogenous increases in average industry and firm productivity.

Keywords: firm heterogeneity; international trade; productivity (search for similar items in EconPapers)
JEL-codes: F10 F12 F14 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2012-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (52)

Downloads: (external link)
http://eprints.lse.ac.uk/48928/ Open access version. (application/pdf)

Related works:
Chapter: Heterogeneous Firms and Trade (2014)
Working Paper: Heterogeneous Firms and Trade (2013)
Working Paper: Heterogeneous Firms and Trade (2012)
Working Paper: Heterogeneous Firms and Trade (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:48928

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