This paper uses an oligopoly model with heterogeneous firms to examine how an industry adjusts to rising import competition. The model predicts that in the short run the least efficient firms in the industry become inactive, surviving firms face a fall in output, mark-ups and profits, and the...

Using quantile regression and a rich cross section data set for German manufacturing plants this paper documents that the impact of plant characteristics on export activities varies along the conditional size distribution of the export/sales ratio.