Alessandra Bonfiglioli, Rosario Crinò, Gino Gancia, 13 January 2016

Inequality, both in firm revenues and wages, varies greatly across sectors, has increased over time and is positively correlated to export opportunities. To explain these observations, this column propose a new theory in which firms’ investment at the entry stage affects the variance of the possible realisations of their productivity. It suggests that export opportunities and competition, besides reallocating resources across existing firms, increase the value of technological heterogeneity. This hints to a new powerful channel through which globalisation is making firms and wages more unequal.   

Carlo Altomonte, Tommaso Aquilante, Gianmarco Ottaviano, 23 August 2012

Competitiveness is one of the most debated issues in policy circles. But, what triggers it? Capitalising on the first existing harmonised cross-country dataset measuring the entire range of international activities of firms in seven European countries, this column identifies the triggers of competitiveness. It argues that policymaking could be improved by firm-level evidence if there were less reluctance to the use of micro-founded indicators to inform policy decisions.

Nicolas Berman, Thierry Mayer, Philippe Martin, 22 October 2009

The prices of tradable goods are remarkably insensitive to exchange rate movements. This column provides a firm-level explanation. In response to a depreciation, high-performance firms raise their mark-ups rather than their export volumes, and their choices dominate the aggregate export variables.

Matthieu Crozet, Pamina Koenig, Vincent Rebeyrol, 14 January 2009

Institutional failures impede international trade, but they do not impose uniform costs on firms as tariffs do. This column says that institutional insecurity, in addition to lowering the total volume of trade, may discourage the most productive firms from exporting to a country. Improving governance can then produce big gains from trade.

Hylke Vandenbussche, 03 October 2008

Antidumping duties have become the most frequently used instrument of trade protection. Antidumping protection can be “abused” to shelter uncompetitive domestic industries from more efficient rather than “unfair” foreign importers. This column shows that antidumping duties protect inefficient domestic firms and impede efficiency gains.

Karolina Ekholm, Andreas Moxnes, Karen-Helene Ulltveit-Moe, 30 August 2008

Exporting industries loathe real exchange rate appreciations that hurt their ability to sell abroad. But this column says that such shocks are also good news, as they may trigger industry restructuring and spur productivity growth.

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