Recent evidence suggests that firms face tradeoffs between serving domestic and foreign markets. We advance this literature by first differentiating between two types of exporters, transitory and perennial exporters, and then documenting differential behaviors for these firms. Using data on...

This paper studies the differences in firm size distributions between European countries. We start by documenting large differences using the EFIGE database: in the countries under most severe distress in the sample (Italy and Spain) firms are relatively small compared with the remaining...

Studies measuring barriers to firm growth assume economies are closed, ignoring information on firm exports. We argue that this information is key to interpret data and improve the accuracy of model predictions. To show this, we develop a dynamic model with export and domestic barriers. We show...

I study how growth, via structural transformation, affects volatility. Growth in the United States has led to a shift in resources from agriculture and manufacturing to services. Since the service sector is the least volatile, this shift can potentially reduce aggregate volatility. Existing...

The international trade literature finds strong links between firm growth and export decisions. In spite of this, the literature analyzing cross-country differences in firm growth commonly abstracts from trade. We develop a tractable, dynamic model to understand the consequences of this...

The reaction of trade volumes to tariffs is far larger than what current models predict. One reason for this is that they abstract from endogenous productivity choices (“innovation”), which amplify this reaction. To show this, I develop a model of international trade with innovation, and...

Large firms contribute disproportionately to the economic performance of countries: they are more productive, pay higher wages, enjoy higher profits and are more successful in international markets. The differences between European countries in terms of the size of their firms are stark. Firms...

I study the implications of endogenous productivity choices ("innovation") on the effects of trade liberalization. I find that a model with innovation generates an elasticity of trade volumes to tariff reductions that is fifty percent larger than models without innovation, and consistent in...

I study the implications of endogenous productivity choices ("innovation") on the effects of trade liberalization. I find that a model with innovation generates an elasticity of trade volumes to tariff reductions that is fifty percent larger than models without innovation, and consistent in...