Blog Post

Trade and firm heterogeneity

‘The empirics of firm heterogeneity and international trade’, co-authored by Bernard, Jensen, Redding and Schott, provides a detailed analysis of new developments in trade theory. The paper is featured on the reading list of the Economist Free Exchange. New trade theories shifted away from the traditional focus on comparative advantage and emphasized the role of […]

By: Date: February 3, 2012 Topic: Energy & Climate

‘The empirics of firm heterogeneity and international trade’, co-authored by Bernard, Jensen, Redding and Schott, provides a detailed analysis of new developments in trade theory. The paper is featured on the reading list of the Economist Free Exchange.

New trade theories shifted away from the traditional focus on comparative advantage and emphasized the role of increasing returns to scale and consumer demand for variety. The building block of the analysis was the representative firm. New micro datasets however allow for firm heterogeneity, revealing an avenue of research that challenges previous approaches.

Here are some of the recent findings illustrated by Bernard et al.:

– Exporting firms tend to be larger and have higher productivity levels than non-exporting firms

– By reallocating resources across firms within industries, liberalizing trade will raise average productivity

– Reducing trade costs determines firms to adjust their product range, as well as to reevaluate their decision about serving foreign markets and organizing foreign production

– Firm analysis makes it possible to understand the relationship between trade and wage inequality

Firm heterogeneity also lies at the heart of Bruegel’s EFIGE project, which makes use micro data from the EFIGE survey to look into how the recession affected European companies. The latest blueprint analyses firm trade behavior, performance and employment decisions, among others.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.


Warning: Invalid argument supplied for foreach() in /home/bruegelo/public_html/wp-content/themes/bruegel/content.php on line 449
View comments
Read about event

Upcoming Event

Jan
24
12:30

Corporate taxation in the digital era

How can we address digital taxation in the EU? Is the proposed "equalisation tax" on turnover the best policy to tackle the challeges posed by digital taxation?

Speakers: Johannes Becker, Dmitri Jegorov, Maria Demertzis, Stephen Quest and Stef van Weeghel Topic: European Macroeconomics & Governance, Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic

Live Event

Jan
22
09:15

EU long term climate change strategy

This meeting, which will take place in Rome, is part of the project “Developing the EU long-term climate strategy”.

Topic: Energy & Climate Location: Rome, Italy
Read about event More on this topic

Upcoming Event

Jan
24
09:15

EU Long Term Climate Change Strategy

This meeting, which will take place in Berlin, is part of the project “Developing the EU long-term climate strategy”.

Topic: Energy & Climate Location: Berlin, Germany
Read about event More on this topic

Past Event

Past Event

Energy digitalization: challenges and opportunities for the industry

What are the the industrial implications of Europe’s digital energy revolution? What new business models do we need to make the best of it? What policy frameworks do we need to facilitate this development?

Speakers: Laura Cozzi, Jean Jacques Marchais, Hans Nieman, Mark van Stiphout and Simone Tagliapietra Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: January 17, 2018
Read about event More on this topic

Upcoming Event

Jan
26
09:30

EU Long Term Climate Change Strategy

This meeting, which will take place in Copenhagen, is part of the project “Developing the EU long-term climate strategy".

Topic: Energy & Climate Location: Copenhagen, Denmark
Read article More on this topic

Blog Post

Climate change adds to risk for banks, but EU lending proposals will do more harm than good

Climate change is a relevant risk factor for the banking sector, but the European Commission's plan to lower capital requirements for greener investments is irresponsible in encouraging banks to forego proper risk management.

By: Arnoud Boot and Dirk Schoenmaker Topic: Energy & Climate Date: January 16, 2018
Read about event More on this topic

Upcoming Event

Jan
29
12:30

EU long term climate change strategy

This meeting, which will take place in Czestochowa, is part of the project “Developing the EU long-term climate strategy”.

Topic: Energy & Climate Location: Czestochowa, Poland
Read article More on this topic

Blog Post

No Financial Meltdown

Intel suffered only minimal pain in the stock market following revelations about the ‘Meltdown’ hardware vulnerability. But if the market won’t compel providers to ensure the safety of their hardware, what will?

By: Alexander Roth and Georg Zachmann Topic: Innovation & Competition Policy Date: January 15, 2018
Read about event More on this topic

Upcoming Event

Feb
6
12:30

The implications of Blockchain platforms

The disruptive forces of block chain technologies in markets and industries: a European perspective

Speakers: Anna Dimitrova, Julio Faura, Georgios Petropoulos, Johan Pouwelse and Pēteris Zilgalvis Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic

Upcoming Event

Feb
8
10:30

Impact of Brexit on the EU energy system

This meeting will build on Bruegel’s recent report for the European Parliament (link) and will consist of two sessions. The first session will discuss the impact of Brexit on the EU energy sector, with a special focus on the consequences of Brexit for the Irish energy system. The second session will look at the impact of Brexit in terms of […]

Speakers: Georg Zachmann and Richard Tol Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author

Blog Post

The growing presence of robots in EU industries

While it is always tempting to try to predict future patterns in the automation of European industries, it is also insightful to assess key dimensions of their robotisation so far, starting from the pre-AI era. This article presents evidence on the use of industrial robots by European industries from 1993 and onwards.

By: Georgios Petropoulos Topic: Innovation & Competition Policy Date: December 20, 2017
Read article Download PDF

External Publication

European Parliament

The Impact of Brexit on the EU Energy System

What will be the impact of Brexit on the EU energy system? With or without the UK, the EU will be able to complete its market, to achieve its climate and energy targets with feasible readjustments, and to maintain supply security

By: Gustav Fredriksson, Alexander Roth, Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance, European Parliament, Testimonies Date: December 19, 2017
Load more posts