Blog Post

Trade and firm heterogeneity

‘The empirics of firm heterogeneity and international trade’, co-authored by Bernard, Jensen, Redding and Schott, provides a detailed analysis of new developments in trade theory. The paper is featured on the reading list of the Economist Free Exchange. New trade theories shifted away from the traditional focus on comparative advantage and emphasized the role of […]

By: Date: February 3, 2012 Topic: Digital economy and innovation

‘The empirics of firm heterogeneity and international trade’, co-authored by Bernard, Jensen, Redding and Schott, provides a detailed analysis of new developments in trade theory. The paper is featured on the reading list of the Economist Free Exchange.

New trade theories shifted away from the traditional focus on comparative advantage and emphasized the role of increasing returns to scale and consumer demand for variety. The building block of the analysis was the representative firm. New micro datasets however allow for firm heterogeneity, revealing an avenue of research that challenges previous approaches.

Here are some of the recent findings illustrated by Bernard et al.:

– Exporting firms tend to be larger and have higher productivity levels than non-exporting firms

– By reallocating resources across firms within industries, liberalizing trade will raise average productivity

– Reducing trade costs determines firms to adjust their product range, as well as to reevaluate their decision about serving foreign markets and organizing foreign production

– Firm analysis makes it possible to understand the relationship between trade and wage inequality

Firm heterogeneity also lies at the heart of Bruegel’s EFIGE project, which makes use micro data from the EFIGE survey to look into how the recession affected European companies. The latest blueprint analyses firm trade behavior, performance and employment decisions, among others.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

Read about event More on this topic
 

Upcoming Event

Jan
25
17:00

Where is Biden's climate policy?

A year after his inauguration, what has President Biden really achieved on climate?

Speakers: Samantha Gross, Dan Lashof, Michael Mehling and Simone Tagliapietra Topic: Green economy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More by this author
 

Podcast

Podcast

Make AI boring again

How can AI education improve workers' experience?

By: The Sound of Economics Topic: Digital economy and innovation, Inclusive growth Date: January 19, 2022
Read about event More on this topic
 

Past Event

Past Event

Productivity and the role of Global Value Chains

The 3rd MICROPROD Policy Dialogue will tackle how Global Value Chains (GVC) and productivity affect the fourth industrial revolution.

Speakers: Carlo Altomonte, Eric Bartelsman, Maria Demertzis and Margit Molnar Topic: Digital economy and innovation Date: January 18, 2022
Read article Download PDF More on this topic
 

Working Paper

The effect of COVID certificates on vaccine uptake, public health, and the economy

An analysis of the incentive effects of COVID certificates on vaccine uptake, health outcomes and the economy.

By: Miquel Oliu-Barton, Bary Pradelski, Nicolas Woloszko, Lionel Guetta-Jeanrenaud, Philippe Aghion, Patrick Artus, Arnaud Fontanet, Philippe Martin and Guntram B. Wolff Topic: Digital economy and innovation Date: January 17, 2022
Read article Download PDF More on this topic
 

Policy Contribution

Decarbonisation of the energy system

Our analysis highlights that the current national energy and climate plans (NECPs) of EU countries are insufficient to achieve a cost-efficient pathway to EU-wide climate neutrality by 2050.

By: Georg Zachmann, Franziska Holz, Claudia Kemfert, Ben McWilliams, Frank Meissner, Alexander Roth and Robin Sogalla Topic: Green economy Date: January 13, 2022
Read article More on this topic
 

Opinion

How an open climate club can generate carbon dividends for the poor

The German-led G7 can accelerate decarbonisation while tackling climate justice.

By: Andreas Goldthau and Simone Tagliapietra Topic: Green economy Date: January 11, 2022
Read article More on this topic More by this author
 

Opinion

What the EU climate package has to overcome in 2022

An overview of the EU climate package to be negotiated in 2022.

By: Simone Tagliapietra Topic: Green economy Date: January 4, 2022
Read article More on this topic
 

External Publication

Sustainability transition and the European Green Deal: A macro-dynamic perspective

Report of the results of work carried out at ETC/WMGE on Green economy transition: Macroeconomic analytical framework in 2020 and 2021.

By: Nicolò Barbieri, Ilaria Beretta, Valeria Costantini, Alessio D’Amato, Marianna Gilli, Giovanni Marin, Massimiliano Mazzanti, Simone Tagliapietra, Roberto Zoboli,, Mariangela Zoli, Susanna Paleari, Andrea M. Bassi and Stefan Ulrich Speck Topic: Green economy Date: January 3, 2022
Read article More on this topic
 

External Publication

How fast is this novel technology going to be a hit? Antecedents predicting follow-on inventions

In this paper, the authors identify novel technologies on a large-scale and map their re-use trajectories.

By: Michele Pezzoni, Reinhilde Veugelers and Fabiana Visentin Topic: Digital economy and innovation Date: December 22, 2021
Read article
 

Blog Post

European governanceInclusive growth

12 Charts for 21

A selection of charts from Bruegel’s weekly newsletter, analysis of the year and what it meant for the economy in Europe and the world.

By: Hèctor Badenes, Henry Naylor, Giuseppe Porcaro and Yuyun Zhan Topic: Banking and capital markets, Digital economy and innovation, European governance, Global economy and trade, Green economy, Inclusive growth, Macroeconomic policy Date: December 21, 2021
Read article More on this topic
 

Blog Post

How serious is Europe’s natural gas storage shortfall?

Europe may not have enough natural gas in storage for the coming winter; close monitoring of the situation will be essential.

By: Georg Zachmann, Ben McWilliams and Giovanni Sgaravatti Topic: Green economy Date: December 21, 2021
Read article Download PDF More on this topic
 

Working Paper

Market power and artificial intelligence work on online labour markets

In this working paper, the authors investigate three alternative but complementary indicators of market power on one of the largest online labour markets (OLMs) in Europe.

By: Néstor Duch-Brown, Estrella Gomez-Herrera, Frank Mueller-Langer and Songül Tolan Topic: Digital economy and innovation Date: December 16, 2021
Load more posts