TITLE:
Domestic Firms, Exporters and Importers: A Systemic Perspective
AUTHORS:
Jeffrey Yi-Lin Forrest, Michael E. Trebing, Anindya Chatterjee, Joachim Wagner
KEYWORDS:
Market Competition, Productivity, Profitability, Sunk Cost, Systemic Yoyo, Wage
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.4,
March
29,
2019
ABSTRACT: Based on the exponentially growing literature in
recent years on international trade and firm performance, this paper develops a
general theory for this area based on systemic logic and game theory. After
developing two theorems on the dynamics of the domestic market, we direct our
attention to establishing results on exports to either less developed or
advanced markets. Finally, a general theory is formulated regarding
international trade (exports and imports) that includes selected indices of
firm performance (productivity, profitability, wages, and survival). In
addition to confirming empirical findings in the literature, we also delineate
some suggestions for future research. This paper introduces systemic thinking
into the study of international trade that is expected to provide a much needed
framework for public debates and policy decision making.