find export status to be positively correlated with both product market power (markups) and market power consolidated on …-cost markups), (ii) labor market imperfections (workers' bargaining power during worker-firm negotiations or firm's degree of wage …-setting power) and (iii) revenue productivity. We apply this framework to analyze whether the pricing behavior of firms in product …

productivity and Tobin's q using firm-level data of Japanese firms. Our findings support predictions by Helpman, Melitz, and Yeaple … (2004) and by Chen, Horstmann, and Markusen (2008). That is, we find that firms with higher productivity tend to choose more … less foreign outsourcing of production. The difference in productivity is relatively less important for the choice between …

aggregate export and FDI sales relative to the domestic and foreign market sizes. In particular, it is shown that firm level … heterogeneity is an important determinant of relative export and FDI flows. We use the model to derive testable empirical … predictions on the relative aggregate export and FDI sales in a given country for a given sector based both on relative costs and …