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The Opportunity Costs of Entrepreneurs in International Trade

Staff Report 533 | Published August 1, 2016

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Authors

Pau S. Pujolàs McMaster University

Kim J. Ruhl University of Wisconsin and National Bureau of Economic Research

The Opportunity Costs of Entrepreneurs in International Trade

Abstract

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 wage in the span-of-control model.


Published In: Economics Letters (Vol. 146, 2016, pp. 01-03) https://doi.org/10.1016/j.econlet.2016.07.012

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