manufacturing firms. The theory underlying our model is consistent with Melitz (2003). A nonlinear structural estimation procedure …

Melitz (2003) demonstrates that greater trade openness raises industry productivity via a selection effect and via a … production re-allocation effect. Our comment points out that the set-up assumed in the Melitz model displays a trade off between … static and dynamic efficiency gains. That is, although freer trade improves industry productivity in a level sense, it harms …

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 …

Melitz (2003) demonstrates that greater trade openness raises industry productivity via a selection effect and via a … production re-allocation effect. Our comment points out that the set-up assumed in the Melitz model displays a trade off between … static and dynamic efficiency gains. That is, although freer trade improves industry productivity in a level sense, it harms …