JOURNAL ARTICLE

Firms' heterogeneity and intraindustry reallocation: Beyond dichotomous partitioning.

  • Published In: International Journal of Economic Theory, 2025, v. 21, n. 1. P. 64 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Chen, Xi 3 of 3

Abstract

This paper studies the trade‐induced reallocation of resources beyond the conventional partition in trade models. It challenges the typical partition of firms into domestic‐only and trading entities. The paper demonstrates that reallocation across heterogeneous firms can occur without such dichotomous partitioning. For reallocation to happen, firms must have different exposure to international markets. The paper uses offshoring models with labor market frictions to illustrate this principle. The offshoring model reveals that labor market frictions induce variations in wage and offshoring intensity. These variations then lead to differential impacts from offshoring cost shifts, resulting in reallocation across heterogeneous firms without partition. [ABSTRACT FROM AUTHOR]

Additional Information

  • Source:International Journal of Economic Theory. 2025/03, Vol. 21, Issue 1, p64
  • Document Type:Article
  • Subject Area:Economics
  • Publication Date:2025
  • ISSN:1742-7355
  • DOI:10.1111/ijet.12415
  • Accession Number:183977223
  • Copyright Statement:Copyright of International Journal of Economic Theory is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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