Comparative Advantage and Hetero-geneous Firms
By Andrew B. Bernard, Stephen J. Redding, Peter K. Schott. 2004
330 citations recorded by the source corpus.
This paper presents a model of international trade that features heterogeneous firms, relative endowment differences across countries, and consumer taste for variety. The paper demonstrates that firm reactions to trade liberalization generate endogenous Ricardian productivity responses at the industry level that magnify countries' comparative advantage. Focusing on the wide range of firm-level reactions to falling trade costs, the model also shows that, as trade costs fall, firms in comparative advantage industries are more likely to export, that relative firm size and the relative number of firms increases more in comparative advantage industries and that job turnover is higher in comparative advantage industries than in comparative disadvantage industries.
View Paper: https://www.semanticscholar.org/paper/dbee7bfd129ad84649615273969e3b2b8c7878e0
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
- B. Javorcik
- Tibor Besedeš
- L. Iacovone
- Peter K. Schott
- In Song Kim
- J. B. Jensen
- Shang-jin Wei
- Thomas J. Prusa
Citations in the corpus
- Multi-Product Exporters: Product Churning, Uncertainty and Export Discoveries (2010, background): “…encompass groundbreaking contributions that allowed for the incorporation of firm-level heterogeneity into trade models (Melitz, 2003; Yeaple, 2005; Bernard et al., 2007a,b), innovative empirical studies evaluating firm-level responses to trade reforms (Pavcnik, 2002; Trefler, 2004; Schor, 2004;…”
- Internationalization and Economic Performance of Enterprises: Evidence from Firm-Level Data (2011, unknown): “Following Bernard et al. (2007), we also perform an OLS estimation additionally controlling for the firm size.”
- A Global View of Productivity Growth in China (2016, unknown): “Speci cally, using equations (3) and (6) as well as the de nitions of ' ijs and e 'ijs, changes in welfare induced by discrete changes in the productivity parameters bis can be written as”
- Wage inequality, technology and trade: 21st century evidence (2011, background): “The latter reallocation effect is now more conventional in the heterogeneous trade literature (e.g. Melitz, 2003; Bernard, Redding and Schott, 2007, 2010; Pavcnik, 2002), but it is reassuring to see it in the data.”
- FIRM HETEROGENEITY, EXPORTING AND FOREIGN DIRECT INVESTMENT* (2007, unknown): “Exit from export markets is correlated with similar firm level variables as entry: it is less likely the larger, more productive and more human capital intensive the firm, and the lower the ratio of exports to domestic sales; see for example Greenaway and Kneller (2003) and Blalock and Roy (2005). I”
- Labor Reallocation in Response to Trade Reform (2011, background): “Bernard, Redding and Schott (2007) embed heterogeneous firms in a classic trade model and derive predictions for labor turnover.”