Heterogeneous Firms and Trade

Marc Melitz and Stephen Redding

No 18652, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: F10 F12 F14 (search for similar items in EconPapers)
Date: 2012-12
New Economics Papers: this item is included in nep-bec
Note: ITI
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Citations: View citations in EconPapers (56)

Published as Handbook of International Economics Volume 4, 2014, Pages 1–54 Handbook of International Economics Cover image Chapter 1 – Heterogeneous Firms and Trade ☆ Marc J. Melitza, b, c, Stephen J. Reddingb, c, d

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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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