Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71605
Authors: 
Bernard, Andrew B.
Redding, Stephen
Schott, Peter K.
Year of Publication: 
2004
Series/Report no.: 
IFS Working Papers, Institute for Fiscal Studies (IFS) 04/24
Abstract: 
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.
Subjects: 
Heckscher-Ohlin
international trade
inter-industry trade
intra-industry trade
trade costs
entry and exit
JEL: 
F11
F12
L11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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