This paper develops a theory of firm selection and growth and embeds it into an international trade framework of … continuous arrival of new potential producers. Firms can also pay an increasing market penetration cost to sell more to a given … market. The model is consistent with a set of salient regularities of firm and exporter selection and growth, as well as the …

the larger country's share in world endowments and its share in producing firms: the so called home market effect (HME …

Recent trade theory in the Krugman (1980) tradition predicts that countries with larger market size enjoy higher levels … market size and TFP. We argue that models with heterogeneous firms and selection help to reconcile theory and data. While … they do feature a home market effect – larger countries have an over-proportionate share of firms – and, therefore, have …

channels of influence: a price increase due to the elimination of product market competition, an adjustment in plant location …

financial market characteristics and contracting environments in both the source and the destination country. Trade increases in …

Firms adjust to differences in market size and demand uncertainty by changing the frequency and size of their export … data we confirm that firms adjust on both margins for market size. In a stochastic setting, firms adjust to increased …

at the firm level. Product innovation is a key factor for successful market entry in models of creative destruction and … Schumpeterian growth. Process innovation helps securing a firm's market position given the characteristics of its product supply …. Both modes of innovation are expected to raise a firm's propensity to export. According to new trade theory, we conjecture …