productive firms in this setting are not only larger and make higher profits but they also have to pay higher wages due to rent … operating profits and hence have to pay higher wages than non-exporters. This exporter wage premium provides a source for losses … from trade and, all other things equal, makes a negative employment effect of trade more likely. Furthermore, it …

, leading to a link between a firm's operating profits and wages of workers employed by this firm. We estimate the parameters of … aggregate employment …