The Cross Sectional Dynamics of Heterogenous Trade Models

Luca David Opromolla and Alfonso Irarrazabal ()

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: In this paper we propose a framework for studying export dynamics and market specific flows in a multicountry model of trade with heterogenous firms.Countries are asymmetric in terms of their size, the size distribution of potential entrants, properties of firms idiosyncratic shocks, and trade barriers. The model has predictions in terms of cross-sectional moments and exporters dynamics. We show that persistent productivity shocks are enough to account for, qualitatively, many features of the data. In particular, the model is consistent with observed patterns of entry and exit across markets, export sales distribution, and the life cycle of new exporters.

JEL-codes: F10 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:w200924

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