Firm heterogeneity – implications for growth, trade and labour market flows

The existence of large differences in firm productivity is now well documented. Current research has suggests that these differences are important for understanding firm size evolution, the contribution of reallocation to growth, the observed patterns of international trade, and the magnitude and dynamics of worker and job flows. The course is based on recent research by the instructor and his associates on the Danish matched employer-employee data. The research constitutes the development and estimation of structural models designed to fit observed firm size dynamics, the relationship between firm productivity size as well as firm life cycles, trade propensities, and worker flows. The lectures will focus on model development although empirical results to date will also be reported.