technology of European industries relative to the rest of the world can be empirically assessed in a way that is simple in terms …

technology of European industries relative to the rest of the world can be empirically assessed in a way that is simple in terms …

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 … firms. To reconcile theory with data, we show that a lower degree of external economies of scale (EoS) is needed than what …