This paper studies the impact of trade liberalization on the productivity growth of two asymmetric countries in a R&D driven growth model with heterogeneous firms. The Melitz’s reallocation of production induces positive but asymmetric productivity gains. Growth is also affected in an...

In this paper, we develop an empirical strategy based on the treatment evaluation model to show (i) that sunk entry costs exist for French firms and (ii) that firms? productivity significantly affects their level of sunk costs. Given our empirical results, we extend the basic Melitz [2003] model...