Betting on exports: Trade and endogenous heterogeneity

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• dc.contributor.author Bonfiglioli, Alessandra
• dc.contributor.author Crinò, Rosario
• dc.contributor.author Gancia, Gino A.
• dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
• dc.date.accessioned 2020-05-25T09:27:08Z
• dc.date.available 2020-05-25T09:27:08Z
• dc.date.issued 2014-12-01
• dc.date.modified 2020-05-25T09:24:30Z
• dc.description.abstract We study the equilibrium determinants of firm-level heterogeneity in a model in which firms can affect the variance of their productivity draws at the entry stage and we explore the implications in closed and open economy. By allowing firms to choose the size of their investment in innovation projects of unknown quality, the model yields a Pareto distribution for productivity with a shape parameter that depends on industry-level characteristics. A novel result is that export opportunities, by increasing the payoffs in the tail, induce firms to invest in bigger projects with more spread-out outcomes. Moreover, when more productive firms also pay higher wages, trade amplifies wage dispersion by making all firms more unequal. These results are consistent with new evidence on how firm-level heterogeneity and wage dispersion vary in a panel of U.S. industries. Finally, we use patent data across U.S. states and over time to provide evidence in support of a specific mechanism of the model, namely, that export opportunities increase firm heterogeneity by fostering innovation.
• dc.format.mimetype application/pdf*
• dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1460
• dc.identifier.citation The Economic Journal, 128 (609), 2018, 612-651.
• dc.identifier.uri http://hdl.handle.net/10230/23013
• dc.language.iso eng
• dc.relation.ispartofseries Economics and Business Working Papers Series; 1460
• dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
• dc.subject.keyword firm heterogeneity
• dc.subject.keyword productivity dispersion
• dc.subject.keyword wage inequality
• dc.subject.keyword international trade.
• dc.subject.keyword Macroeconomics and International Economics
• dc.title Betting on exports: Trade and endogenous heterogeneity
• dc.title.alternative
• dc.type info:eu-repo/semantics/workingPaper