The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity

# The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity > OpenAlex Metadata Hub · https://openalex.org/W2548687046 ## Bibliographic - **DOI:** 10.3386/w8881 - **Year:** 2002 - **Citations:** 3059 - **Open Access:** Yes (green) - **License:** — - **Source:** https://doi.org/10.3386/w8881 ## Authors - Mark Melitz ## Abstract This paper builds a dynamic industry model with heterogeneous firms that explains why international trade induces reallocations of resources among firms in an industry. The paper shows how the exposure to trade will induce only the more productive firms to enter the export market (while some less productive firms continue to produce only for the domestic market) and will simultaneously force the least productive firms to exit. It then shows how further increases in the industry's exposure to trade lead to additional inter-firm reallocations towards more productive firms. These phenomena have been empirically documented but can not be explained by current general equilibrium trade models, because they rely on a representative firm framework. The paper also shows how the aggregate industry productivity growth generated by the reallocations contributes to a welfare gain, thus highlighting a benefit from trade that has not been examined theoretically before. The paper adapts Hopenhayn's (1992a) dynamic industry model to monopolistic competition in a general equilibrium setting. In so doing, the paper provides an extension of Firms with different productivity levels coexist in an industry because each firm faces initial uncertainty concerning its productivity before making an irreversible investment to enter the industry. ## Keywords Productivity, Aggregate (composite), Intra-industry trade, Industrial organization, Multifactor productivity, Business, International trade, Agricultural economics, Economics, Trade barrier, Total factor productivity, Macroeconomics ## Concepts - Productivity - Aggregate (composite) - Intra-industry trade - Industrial organization - Multifactor productivity - Business - International trade - Agricultural economics - Economics - Trade barrier - Total factor productivity - Macroeconomics - Composite material - Materials science --- *Metadata only — full text not imported unless Open Access license permits.*

Bài “The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity” được TradingBase chuyển thành Knowledge Product cho trader — không phải trang đọc abstract OpenAlex. Tóm lược học thuật (đã diễn giải): This paper builds a dynamic industry model with heterogeneous firms that explains why international trade induces reallocations of resources among firms in an industry. The paper shows how the exposure to trade will induce only the more productive firms to enter the export market (while some less productive firms continue to produce only for the domestic market) and will simultaneously force the least productive firms to exit. It then shows how further increases in the industry's exposure to trade lead to additional inter-firm reallocations towards more productive firms. These phenomena have been empirically documented but can not be explained by current general equilibrium trade models, because they rely on a representative firm framework. The paper also shows how the aggregate industry productivity growth generated by the reallocations contributes to a welfare gain, thus highlighting a… Phần Trading Insights bên dưới nối nghiên cứu với Forex, vàng, USD, lãi suất và risk regime — để bạn đưa vào journal và playbook. Metadata DOI/OA chỉ là rail tham chiếu; nội dung chính là summary, takeaways và ứng dụng thị trường do Content Factory sinh.