The opportunity costs of entrepreneurs in international trade

Timothy J. Kehoe, Pau S. Pujolàs, Kim J. Ruhl

Research output: Contribution to journalArticlepeer-review

5 Scopus citations


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 languageEnglish (US)
Pages (from-to)1-3
Number of pages3
JournalEconomics Letters
StatePublished - Sep 1 2016

Bibliographical note

Publisher Copyright:
© 2016 Elsevier B.V.


  • Firm heterogeneity
  • Income distribution
  • International trade
  • Span-of-control model


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