ABSTRACT
Traditional international trade models rest upon the assumption of firms' symmetry within a particular industry and in a particular country. This assumption implies that they all face the same demand functions and produce under the same technologies. As a result, all firms produce the same goods, set the same price and supply the same quantities. Thus, if there are exports, all firms in the industry are exporters (Basile, 2001, p. 1185). However, a growing body of work has extensively documented, both theoretically and empirically, the considerable inter-firm het erogeneity in export performance among firms in the same industry within the same country. This variation stems from various sources of firm-level heterogeneity, which relate primarily to technological advantages, as well as to other firm-specific characteristics (Basile, 2001, p. 1186).
