This paper tests some of the predictions of recent advances in trade theory that have focused on different trade patterns of firms within the same sector. Helpman, Melitz and Yeaple (2005) develop a model in which innate productivity differences between firms determine the degree of...

This paper analyses the relationship between firm productivity and export behavior in German manufacturing firms. We examine whether productivity increases the probability of exporting, and assert that there is a causal relationship from high productivity to entering foreign markets, as...

Using a rich database on Italian manufacturing firms, we test the hypothesis that self-selection mechanisms differ from market to market. We observe significant ex ante productivity differences between firms starting to export to distinct geographical areas. Country characteristics such as size,...

Does the selection effect of trade work solely through competition from imports, or does the export market further contribute to firm selection? This paper provides a re-interpretation of the different mechanisms in terms of selection on profitability—rather than productivity—and derives...