The effects of geography and productivity on the global pattern of production are captured here in a specific factors … gravity model. Simple enough for sharp results, the model is yet rich enough to contain the high dimensional productivity … productivity frictions inferred from gravity. Sellers' and buyers' incidence both reduce real income. Sellers' incidence shocks …

-neutral technology differences are measured using an application of the theory of total factor productivity comparisons, and factor …The standard neoclassical model of trade theory predicts that international specialization will be jointly determined … by cross-country differences in relative factor endowments and relative technology levels. This paper uses duality theory …

trade shifts the distribution towards higher average productivity due to entry and exit of firms. These models ignore the … assumption, produce in their 'birth nation.' We show that when firms are allowed to switch locations, new productivity effects … reinforces the big-nation productivity gain while reducing or even reversing the small-nation productivity gain. The small nation …

liberalization. Firm productivity in a given product is modeled as a combination of firm-level "ability" and firm …-level ability raises a firm's productivity across all products, which induces a positive correlation between a firm's intensive … (output per product) and extensive (number of products) margins. Trade liberalization fosters productivity growth within and …

We develop a monopolistically competitive model of trade with firm heterogeneity - in terms of productivity differences … productivity of competing firms. We analyze how these features vary across markets of different size that are not perfectly … in that market. Aggregate productivity and average markups thus respond to both the size of a market and the extent of …

Melitz (2003) demonstrates that greater trade openness raises industry productivity via a selection effect and via a … static and dynamic efficiency gains. That is, although freer trade improves industry productivity in a level sense, it harms … endogenises the growth rate of industry productivity and we show that liberalisation slows growth …

firm framework. The paper also shows how the aggregate industry productivity growth generated by the reallocations …, the paper provides an extension of Krugman's (1980) trade model that incorporates firm level productivity differences …. Firms with different productivity levels coexist in an industry because each firm faces initial uncertainty concerning its …