Export, Production Progress, Skilled Labor Demand and Strategies of Heterogeneous Firms

This document constructs a partial equilibrium model of heterogeneous firms to analyze their strategies on production progress and whether export. The conclusion indicates that the strategies of heterogeneous firms depend on the relative fixed cost of export, the transportation cost, relative market size of home country, marginal production costs for different production progresses and the productivity of individual firm. And firm with high productivity is more likely to choose the strategy of export and high-tech production progress and hire more skilled labor.