Year: 2007
Type: article
Abstract: Despite the fact that importing and exporting are extremely rare firm activities, economists generally devote little attention to the role of firms when discussing international trade.This paper summarizes key differences between trading and non-trading firms, demonstrates how these differences present a challenge to standard trade models and shows how recent "heterogeneous-firm" models of international trade address these challenges.We then make use of transaction-level U.S. trade data to introduce a number of new stylized facts about firms and trade.These facts reveal that the extensive margins of trade --that is, the number of products firms trade as well as the number of countries with which they trade --are central to understanding the well-known role of distance in dampening aggregate trade flows.
DOI: 10.1257/jep.21.3.105
Authors: Andrew B Bernard, J. Bradford Jensen, Stephen J Redding, Peter K Schott
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: bronze
Awards: ITR-(ECS+ASE)-(dmc+int): Info Tech Challenges for Secure Access to Confidential Social Science Data, Firms and Product Choice in International Trade, Estimating Cross-Country Differences in Product Quality, Measuring the Size, Scope, and Impact of Trade in Services, The New International Division of Labour
OpenAlex ID: W233209460