Recent literature on the workhorse model of intra-industry trade has explored heterogeneous cost structures at the firm level. These approaches have proven to add realism and predictive power. This note shows, however, that this added realism also implies that there may exist a positive...

Why is it that exporter productivity premia (EPP) differ so widely in size? We take this question to the theory and to the data. We derive the sectoral EPP in a standard heterogeneous firms trade model and apply the insights from the model to 13 years of data for all Danish manufacturing firms....

This paper deploys a dynamic extension of the Melitz (2003) model to generate predictions on export market exit and firm survival in a setting where firms endogenously make exit decisions. The central driver of the model dynamics is the inclusion of exogenous economy wide technological progress....