Andrzej Cieślik, Jan Jakub Michałek and Iryna Gauger
frameworks of the new trade theory through which economists study the relationship between productivity and international trade flows. In these models, the effects of trade liberalization vary across producers and depend on their productivity levels in particular. Aggregate productivity gains come from improved selection and increased competition that trade brings.
A large number of empirical studies confirmed many of the predicted patterns predicted by the new trade theories that accounted for firm heterogeneity (e.g., Pavcnik, 2002 ; Bernard et al ., 2006 ; and
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