We show that a trade model with an exogenous set of heterogeneous firms with fixed operating costs has the same aggregate outcomes as a span-of-control model. Fixed costs in the heterogeneous-firm model are entrepreneurs’ forgone wages in the span-of-control model.
|Original language||English (US)|
|Number of pages||3|
|State||Published - Sep 1 2016|
Bibliographical notePublisher Copyright:
© 2016 Elsevier B.V.
- Firm heterogeneity
- Income distribution
- International trade
- Span-of-control model