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Firm-Productivity and Export under Non-Constant Marginal Costs

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  • Arijit Mukherjee

Abstract

Recent theoretical research shows that exporters are more productive than nonexporters. We show that this result holds almost trivially for the case of constant marginal cost of production, as mainly assumed in the literature, but it may not hold true if the marginal cost is not constant. Our result provides a simple explanation for recent empirical evidence showing exporters are less productive than non-exporters.

Suggested Citation

  • Arijit Mukherjee, 2016. "Firm-Productivity and Export under Non-Constant Marginal Costs," CESifo Working Paper Series 5770, CESifo.
    • Handle: RePEc:ces:ceswps:_5770
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    References listed on IDEAS

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    1. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
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    More about this item

    Keywords

    export; non-constant marginal cost of production; productivity;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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