Abstract: We reconcile trade theory with plant-level export behavior, extending the Ricardian model to accommodate many countries, geographic barriers, and imperfect competition. Our model captures qualitatively basic facts about U.S. plants: (1) productivity dispersion, (2) higher productivity among exporters, (3) the small fraction who export, (4) the small fraction earned from exports among exporting plants, and (5) the size advantage of exporters. Fitting the model to bilateral trade among the United States and 46 major trade partners, we go quite far in matching these facts quantitatively. We examine the impact of globalization and dollar appperciation on productivity, plant entry and exit, and labor turnover in U.S. manufacturing.
Authors: Andrew B.Bernard, Jonathan Eaton, J.Bradford Jensen, and Samuel Kortum
Plants and Productivity in International Trade.pdf
