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A model of firm heterogeneity in factor intensities and international trade


Julian Emami Namini

Ricardo A.


© 2015 Canadian Economics Association. Empirical evidence suggests that exporters are, in addition to being more productive, significantly more skilled-labour intensive than non-exporters. In a setting that captures both these features, we show that the firm selection induced by trade liberalization works along two dimensions. First, export growth increases competition for skilled labour. This leads to the exit of some of the skilled-labour intensive firms, while benefitting unskilled-labour intensive ones. Second, within the group of firms with the same factor intensities, the reallocation of factors is towards the exporters. We show that the increased competition for skilled labour dampens the positive effect of trade liberalization on sector-wide TFP and real income.


Emami Namini, J., Facchini, G., & López, R. A. (2015). A model of firm heterogeneity in factor intensities and international trade. Canadian Journal of Economics / Revue Canadienne d'Économique, 48(4), 1456-1480.

Journal Article Type Article
Acceptance Date Apr 25, 2014
Online Publication Date May 26, 2016
Publication Date 2015-11
Deposit Date May 5, 2018
Publicly Available Date Feb 8, 2019
Journal Canadian Journal of Economics/Revue canadienne d'économique
Print ISSN 0008-4085
Electronic ISSN 1540-5982
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 48
Issue 4
Pages 1456-1480
Public URL
Publisher URL


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