NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Global Firms

Andrew B. Bernard, J. Bradford Jensen, Stephen J. Redding, Peter K. Schott

NBER Working Paper No. 22727
Issued in October 2016
NBER Program(s):International Trade and Investment

Research in international trade has changed dramatically over the last twenty years, as attention has shifted from countries and industries towards the firms actually engaged in international trade. The now-standard heterogeneous firm model posits measure zero firms that compete under monopolistic competition and decide whether to export to foreign markets. However, much of international trade is dominated by a few “global firms,” which participate in the international economy along multiple margins and account for substantial shares of aggregate trade. We develop a new theoretical framework that allows firms to have large market shares and to decide simultaneously on the set of production locations, export markets, input sources, products to export, and inputs to import. Using U.S. firm and trade transactions data, we provide strong evidence in support of this framework's main predictions of interdependencies and complementarities between these margins of firm international participation. Global firms participate more intensively along each margin, magnifying the impact of underlying differences in firm characteristics, and increasing their shares of aggregate trade.

download in pdf format
   (999 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22727

Published: Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2018. "Global Firms," Journal of Economic Literature, vol 56(2), pages 565-619.

Users who downloaded this paper also downloaded* these:
Bernard, Jensen, and Schott Importers, Exporters and Multinationals: A Portrait of Firms in the U.S. that Trade Goods
Coelli, Moxnes, and Ulltveit-Moe w22647 Better, Faster, Stronger: Global Innovation and Trade Liberalization
Kehoe, Pujolas, and Rossbach w22706 Quantitative Trade Models: Developments and Challenges
Pekkala Kerr, Kerr, Özden, and Parsons w22715 Global Talent Flows
Redding and Rossi-Hansberg w22655 Quantitative Spatial Economics
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us