Recent literature on the workhorse model of intra-industry trade has explored heterogeneous cost structures at the firm level. These approaches have proven to add realism and predictive power. This paper presents a new and simple heterogeneous-firms specification. We develop a symmetric...

Economic integration in Europe has had ambiguous effects on industry concentration. The literature has proposed various explanations of the empirical findings. The present paper provides an additional theoretical argument. We show that in a world of monopolistic competition, integration in it...

Recent rounds of GATT and later WTO have advocated widespread tariffication, meaning that existing non-tariff barriers be converted into import equivalent tariffs. From an economic point of view, the effects of such tariffication are not entirely clear. The paper presents a general equilibrium...

Die GATT- und später WTO-Runden der letzten Jahre haben eine weitgreifende Tarifizierung durchgesetzt. Das bedeutet, dass existierende nicht-tarifäre Handelsbarrieren in Volumen-äquivalente Zölle konvertiert werden. Das Motiv einer solchen Maßnahme ist eine größere Transparenz der...

Why is it that exporter productivity premia (EPP) differ so widely in size? We take this question to the theory and to the data. We derive the sectoral EPP in a standard heterogeneous firms trade model and apply the insights from the model to 13 years of data for all Danish manufacturing firms....

An astonishing 33% of all firm-product-destination export spells in Danish data turn out to be isolated single-month one-off export events (observed once in a 49 month window). On average, for an export-active firm, such one-off exports account for 17% of total foreign sales. These patterns...

Temporary migration, though empirically relevant, is often ignored in formal models. This paper proposes a migration model with heterogeneous agents and persistent cross country income differentials that features temporary migration. In equilibrium there exists a positive relation between the...

The dynamics of export market exit and firm closure have found limited attention in the new heterogeneous-firms trade literature. In fact, several of the predictions on firm survival and exit stemming from this new class of models are at odds with the stylized facts. Empirically, higher...

Trade liberalization comes about through reductions in various types of trade costs. This paper introduces, apart from real variable (i.e. iceberg) and fixed export costs, two partially redistributed tariffs into a Melitz (2003) model. We present comparable results for welfare effects and...

Real-world industries are composed from heterogeneous firms and substantial intra-industry reallocations take place, i.e. high productivity firms squeeze out low productivity firms. Previous tax-tool comparisons have not included these central forces of industry structure. This paper examines a...