in a model of network formation with suppliers of heterogeneous productivity and matchability, buyers of heterogeneous … productivity, and intermediaries that reduce matching costs for a brokerage fee. Empirical evidence on trade activity across firms …

, calibrate it to the year 2000 using the World Input-Output Database, and perform a counterfactual analysis of China’s WTO … accession. We find that China's WTO entry accounts for about 45% of the decrease in China's value added exports to exports ratio … results imply that China's WTO accession was the driving force behind the strengthening of production networks with its …

job destruction in low-productivity firms and job creation in high-productivity firms. In contrast, the net effect of … reductions in Chinese input tariffs is limited to job destruction in low-productivity ordinary exporters. …

export growth following the permanent normalization of trade relations with China (PNTR). But there was also an offsetting … declined in the most exposed industries because of the export destruction effect. On aggregate, the US and China both gain from … PNTR, but the gains are larger for China. …

Starting from the premise that productivity is heterogeneous across firms, Melitz (2003) explains why individual … productivity is key in determining the capability of a firm to export. In this paper we build a model along Melitz's lines to show … international markets. We show that firms with low productivity may still be able to penetrate foreign markets provided they have …