American Economic Review: Vol. 93 No. 4 (September 2003)


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Plants and Productivity in International Trade

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Bernard, Andrew B., Jonathan Eaton, J. Bradford Jensen, and Samuel Kortum. 2003. "Plants and Productivity in International Trade." American Economic Review, 93(4): 1268-1290.

DOI: 10.1257/000282803769206296


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: (i) productivity dispersion, (ii) higher productivity among exporters, (iii) the small fraction who export, (iv) the small fraction earned from exports among exporting plants, and (v) the size advantage of exporters. Fitting the model to bilateral trade among the United States and 46 major trade partners, we examine the impact of globalization and dollar appreciation on productivity, plant entry and exit, and labor turnover in U.S. manufacturing. (JEL F11, F17, O33)

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Bernard, Andrew B.
Eaton, Jonathan
Jensen, J. Bradford
Kortum, Samuel

American Economic Review

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