THERE has been considerable theoretical and empirical research in the literature
on exporting and firm performance. Analysis of theoretical studies
with a microeconomic perspective on international trade shows that one could
distinguish three research streams. The traditional or old theories of international
trade (Ricardo, 1817; Heckscher, 1919; Ohlin, 1933) are built on the
concept of comparative advantage, under which it is beneficial for the flow of
goods between countries; the new trade theories propose that there are economies
of scale and consumer tastes or preferences in the flow of goods between
countries (Krugman, 1980; Helpman, 1981; Helpman and Krugman, 1985); and
the heterogeneous-firm trade theories introduce the inter-firm reallocation and
industry productivity growth in the trade model by especially emphasising the
importance of firm heterogeneity in generating international trade (Bernard
et al., 2003; Melitz, 2003; Helpman et al., 2004; Bernard et al., 2007; Melitz
and Ottaviano, 2008).