@inbook {14418,
	title = {International Trade and Heterogeneous Firms},
	booktitle = {New Palgrave Dictionary of Economics, 2nd Edition},
	year = {2008},
	publisher = {Palgrave Macmillan},
	organization = {Palgrave Macmillan},
	abstract = {Empirical studies of production units within sectors have reported a massive amount of heterogeneity in various performance measures (most notably, size and productivity). This heterogeneity, within sectors, matters for theoretical and empirical models of trade. Trade, or trade liberalization more generally, induces important reallocations between heterogeneous producers in a sector: the smallest or least productive producers are forced to exit, and market shares are further reallocated between less productive producers (who do not export) towards larger, more productive exporters. These reallocations generate a new channel for productivity and welfare gains from trade.},
	author = {Marc Melitz}
}
