Global Firms

Abstract

Research in international trade has changed dramatically over the last twenty years, as attention has shifted from countries and industries towards the firms actually engaged in international trade. The now-standard heterogeneous firm model posits measure-zero firms that compete under monopolistic competition and decide whether to export to foreign markets. However, much of international trade is dominated by a few “global firms,” which participate in the international economy along multiple margins and account for substantial shares of aggregate trade. We develop a new theoretical framework that allows firms to have large market shares and decide simultaneously on the set of production locations, export markets, input sources, products to export, and inputs to import. Using US firm and trade transactions data, we provide strong evidence in support of this framework's main predictions of interdependencies and complementarities between these margins of firm international participation. Global firms participate more intensively along each margin, magnifying the impact of underlying differences in firm characteristics and increasing their shares of aggregate trade. (JEL D22, F14, F23, L60, R32)

Employer characteristics and youth employment outcomes in the formal sector in South Africa: Assessment using administrative tax data

“…The evidence also supports the hypothesis that firms learn by importing technologies. These results lend credence to recent evidence on trading firms showing consistently higher premiums than non-trading firms, as well as a slight advantage for importing firms over exporters (Bernard et al 2018;Wagner 2012).…”

Exchange rates and firm export performance in South Africa

“…Our study extends our understanding of the interaction between importing and exporting highlighted by Bernard et al (2007Bernard et al ( , 2018 and Bas and Strauss-Kahn (2014) internationally. They find that firm export performance is strongly associated with firms' productivity and their use of imported intermediate imports.…”

Entering a Foreign Market: Exports, FDI or Strategic Alliance?

“…However, among other things their analysis diers from ours in considering technological spillovers from the more ecient incumbent rm to the less ecient foreign entrants. Finally, in a quite recent paper Bernard et. al.…”

“…At this equilibrium the quantity of the incumbent, x *EX I , exceeds the quantity of the entrant, x *EX E . Now consider that the entrant contemplates about changing his 2 The additional complexity introduced by oligopolistic competition can be observed in Bernard et. al.…”