Reproducing the stylized facts that motivate models of international trade with heterogeneous firms

Abstract

The author of this article shows how to use the publicly available firm-level surveys produced by the World Bank Enterprise Surveys (WBES) to reproduce the stylized facts that characterize firm heterogeneity and its relationship with global engagement. He describes how to incorporate this exercise into different teaching activities, such as small group classes, homework, and coursework assignments. The proposed activities allow students to develop skills handling and analyzing firm-level data, and offer a unique opportunity to evaluate the extent to which the stylized facts established from U.S. data are also representative of other countries. The activities connect the theory of international trade with heterogeneous firms to the real-world empirical evidence that motivated the development of these models.