This paper realizes the Melitz-Pareto model using firm-level data from 40 Chinese manufacturing industries from 1998 and 2007. Under the hypothesis that the productivity of firms in each industry follows a Pareto distribution, we show that the domestic sales of non-exporters and the foreign...

Policies to stimulate export growth and diversify the composition of exports in South Africa are now high on the government’s agenda. In order to understand exporting and its impact on job creation, one needs to understand how firms function, what determines, or constrains, exporting at the...

We show in the Chinese Annual Survey of Industrial Firms that size distributions of non-exporters and exporters have different shapes, which can only be explained by assuming that their productivity distributions have different shapes. Empirical estimations verify this assumption. This paper...

Products produced by a multiproduct firm can be linked through demand linkages or supply linkages. On the demand side, changes in the price of one product can affect the demand for a firm's other products through shifts in consumer expenditures. This is commonly referred to as the...

This paper investigates theoretically and empirically the endogenous investment decision of firms conditioning on export decision. It shows that theoretically, whatever the form of preferences, firms that start exporting invest more and grow more than the others. However, it is shown that when...

We construct a simple model to demonstrate how the firm-level degree of scale economies (D-SE) is determined when firms make technology choice. In particular, we illustrate the importance of external factors that affect the efficiency of firms' technology choice, such as public knowledge stock,...

Most trade theories assume bilateral trade relationships are forged on the basis of some comparative advantages, scale considerations, market structure or some productivity advantage of firms. Since these factors change slowly, bilateral trade relationships should be stable. However, we argue...

The received wisdom is that cheaper foreign inputs may replace tasks previously done by domestic labor, and cause displacement of workers at the home country. However, using the U.S. multinational enterprises data, the empirical evidence in this paper does not support the idea that the imported...

We develop a simple test to assess whether horizontal spillover effects from multinational to domestic firms are endogenous to the market structure generated by the incremental entry of the same multinationals. In particular, we analyze the performance of a panel of 10,650 firms operating in...

Most trade theories assume bilateral trade relationships are forged on the basis of some comparative advantages, scale considerations, market structure or some productivity advantage of firms. Since these factors change slowly, bilateral trade relationships should be stable. However, we argue...