Firms in International Trade

Abstract

Since the mid-1990s, researchers have used micro datasets to study countries' production and trade at the firm level and have found that exporting firms differ substantially from firms that solely serve the domestic market. Across a wide range of countries and industries, exporting firms have been shown to be larger, more productive, more skill- and capital-intensive, and to pay higher wages than nonexporting firms. These differences exist even before exporting begins and have important consequences for evaluating the gains from trade and their distribution across factors of production. The new empirical research challenges traditional models of international trade and, as a result, the focus of the international trade field has shifted from countries and industries towards firms and products. Recently available transaction-level U.S. trade data reveal new stylized facts about firms' participation in international markets, and recent theories of international trade incorporating the behavior of heterogenous firms have made substantial progress in explaining patterns of trade and productivity growth.

Optimal tariffs, retaliation, and the welfare loss from tariff wars in the Melitz model

“…A higher value of b i is associated to a higher mean, but leaves the coefficient of variation constant. 6 A higher value of β comes with a lower coefficient of variation. 6 The mean is biβ/ (β − 1) , the standard deviation is bi √ β/ (β − 1) √ β − 2 and the coefficient of variation…”

Entrepreneurs’ Education and Different Variable Pay Schemes in Italian Firms

“…Exports and a resulting increase in competition may stimulate the use of variable pay to give incentives to workers to enhance their productivity (Brown and Heywood 2002;Drago and Heywood 1995). This hypothesis is confirmed by the higher wage premium offered in other countries by exporting firms (Bernard et al 2007), and furthermore, it is at least partially verified for the Italian economy because the coefficient associated with exposure to international markets is positive and significant at the 10% level. Unexpectedly, with respect to innovation, we found that firms that declared themselves to have undertaken product and process innovation in the three years before the survey did not show a higher probability of adopting VP agreements, which reveals an impasse in trends towards the implementation of strategies that are devoted to enhancing organisational flexibility; these trends emerged in Italy from similar studies in the 1980s (Biagioli and Curatolo, 1989).…”

“…In addition, in conformity with related studies, we introduce the sector and firm size (Brown, 1990), firms' geographical locations and export strategies (as in the literature reviewed by Bernard et al 2007), the presence of unions (Black and Linch, 2001), and training (Gielen, 2011). Finally, we consider technology and innovation that may significantly influence workplace organisation, as shown in Bresnahan, Brynjolfsson and Hitt (2002).…”

Trade Liberalization, Import Penetration and Unionization: The U.S. Experience

“…Bernard et al [16] suggest that our understanding of international trade in terms of the origins and implications would be enriched if researchers shift their focus of international trade from countries and industries toward firms and products. Along these lines, Bernard, et al [17] and Melitz and Ottaviano [18] propose models in which the profit margin is endogenous and decreases as import competition intensifies following reductions in trade costs.…”