Firm Heterogeneity, Exporting and Foreign Direct Investment : A Survey

A new literature on firm heterogeneity and firm level globalisation strategies has developed rapidly over the last decade. New insights on why some firms export and others do not, why some firms fail to survive in export markets and why some choose to produce overseas rather than export have been generated. This paper provides a survey and evaluation of this literature. It reviews both new theories of the firm in an open economy context and the extensive microeconometric evidence base which has now developed. As well as highlighting the implications of this evidence base for policy, the evaluation also includes an assessment of how the research agenda may evolve in the future