Comparative Advantage and Heterogeneous Firms / Andrew B. Bernard, Stephen Redding, Peter K. Schott.

Format:

Book

Author/Creator:

Bernard, Andrew B.

Contributor:

National Bureau of Economic Research.

Redding, Stephen.

Schott, Peter K.

Series:

Working Paper Series (National Bureau of Economic Research) no. w10668.

NBER working paper series no. w10668

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2004.

Summary:

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.

Notes:

Print version record

August 2004.