different shapes, which can only be explained by assuming that their productivity distributions have different shapes. Empirical … estimations verify this assumption. This paper also analyzes the relationship between firms' size and productivity distributions … and shows that: 1) productivity and size distributions change accordingly, and 2) productivity is deterministic for size …

different possible equilibria. Depending on how costly trade is relative to innovation, medium-productivity firms may either … export without innovating, innovate without exporting, do both or do neither. The impact of trade on aggregate productivity …, aggregate productivity need not always increase. After calibrating the model to five European countries, we show that the …

I study the implications of endogenous productivity choices ("innovation") on the effects of trade liberalization. I …