Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/144994
Authors: 
Assenza, Tiziana
Gatti, Domenico Delli
Grazzini, Jakob
Ricchiuti, Giorgio
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 5959
Abstract: 
Starting from the premise that productivity is heterogeneous across firms, Melitz (2003) explains why individual productivity is key in determining the capability of a firm to export. In this paper we build a model along Melitz’s lines to show that also financial capacity, captured by the level of individual net worth, affects the behaviour of firms on international markets. We show that firms with low productivity may still be able to penetrate foreign markets provided they have enough net worth to incur the cost of exporting. In this setting, we explore the effects of changes in transport costs, fixed costs for exporters and of financial constraints.
Subjects: 
productivity
net worth
international trade
heterogeneous firms
JEL: 
E44
F12
F14
F21
Document Type: 
Working Paper

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