Title

Firm-level comparative advantage

Document Type

Journal article

Source Publication

Journal of International Economics

Publication Date

11-2013

Volume

91

Issue

2

First Page

321

Last Page

328

Publisher

Elsevier BV

Keywords

Factor intensity, Firm heterogeneity, Test of trade theories

Abstract

We study the consequences of heterogeneity in factor intensity on firm performance. We present a standard Heckscher–Ohlin model augmented with factor intensity differences across firms within a country–industry pair. We show that for any two firms, each of whose capital intensity is, for instance, one percent above (below) its respective country–industry average, the relative marginal cost of the firm in the capital-intensive industry of the capital-abundant country is lower (higher) than that of the other firm. Our empirical analysis, conducted using data for a large panel of European firms, supports this prediction. These results provide a novel approach to the verification of the Heckscher–Ohlin theory and new evidence on its validity.

DOI

10.1016/j.jinteco.2013.09.002

Print ISSN

00221996

E-ISSN

18730353

Funding Information

Financial support from CEPREMAP and GREQAM and PSE.

Publisher Statement

Copyright © 2013 Elsevier B.V. All rights reserved.

Access to external full text or publisher's version may require subscription.

Additional Information

This article previously published as Crozet, M., & Trionfetti, F. (2011). Comparative advantage and within-industry firms performance. CEPII Working Paper, (2011-01). France: CEPII. Retrieved from http://www.cepii.fr/PDF_PUB/wp/2011/wp2011-01.pdf

Full-text Version

Publisher’s Version

Recommended Citation

Crozet, M., & Trionfetti, F. (2013). Firm-level comparative advantage. Journal of International Economics, 91(2), 321-328. doi: 10.1016/j.jinteco.2013.09.002