We develop a monopolistically competitive model of trade with firm heterogeneity—in terms of productivity differences—and endogenous differences in the "toughness" of competition across markets—in terms of the number and average productivity of competing firms. We analyse how these...

In The Review of Economic Studies 75:1, the co-author's name was incorrectly listed as Giancarlo I. P. Ottaviano. The correct name is as listed above. Copyright 2008, Wiley-Blackwell.

We develop a monopolistically competitive model of trade with firm heterogeneity-in terms of productivity differences-and endogenous differences in the "toughness" of competition across markets-in terms of the number and average productivity of competing firms. We analyse how these features vary...