Industry reallocations in a globalizing economy

We distill the main insights from recent trade models on firms' responses toglobalization. Our primary aim is to assess the economic impact and the welfareimplications of the resulting reallocation of resources across frims and countries. In sodoing, we bring theory into life through the numerical implementation of a theoreticalframework calibrated on European data, which encompasses aspects of economicgeography, firm heterogeneity, and firms' organizational choices. Our final purpose isto provide a comprehensive background for empirical investigations and to stimulatefurther theoretical research....