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In contrast to what several papers have argued recently, we show that firm heterogeneity fosters agglomeration of economic activity. If firms are more similar with respect to their total factor productivity, each company faces a lower propensity to export. This renders the home market more...
Persistent link: https://www.econbiz.de/10010291502
We develop a heterogeneous-firms model with trade in goods, labor mobility and credit constraints due to moral hazard … trade liberalization. While the former leads to more dispersion of economic activity across space, the latter tends to drive …
Persistent link: https://www.econbiz.de/10010291520