This dissertation examines microeconomic aspect of international trade flows in a general equilibrium environment. The primary focus is on firm behaviors such as technology choice, the decision to export, product scope, and extensive export margin. The influences of structural features of the labor market often overlooked are emphasized. These include worker heterogeneity, labor market mobility, and the matching behavior of workers. Considering the manner in which firms engage domestic and foreign product markets, as well as labor markets, provides new insights into the nature of international trade.;The first chapter considers firm technology and export decisions in an environment where labor market mobility is significant and costly. I find that Job and Worker turnover have opposing marginal effects on firm behavior; high job turnover deters firms from adopting the best available technologies, while high worker turnover leads to a greater share of firms using the best production modes. As a result industries with relatively high worker turnover exhibit larger export intensity, lower wage inequality, and spread the gains from trade among a larger share of the workforce.;Chapter 2 demonstrates the importance of worker behavior in trade adjustment. Heterogeneous workers from matches endogenously, each vying for the best jobs and best partners. As international markets become more integrated, workers recognize that export opportunities become larger while domestic markets experience greater competition from foreign firms. Both cause the labor market to reorganize as workers seek out new matches in order to secure export opportunities or avoid unemployment. The post-trade liberalization allocation of the labor market is shown to be more efficient in terms of aggregate productivity. Furthermore, labor market adjustments result in infra-marginal changes in firms, as all firms experience changes in productivity through new management.;Chapter 3 focuses on the how cross-country differences in the degree of heterogeneity in labor endowments and the size of factor endowments jointly describe the pattern of world trade. The theory makes two key predictions. First, high levels of dispersion in ability within labor endowments make the costs of sub-optimal matching more severe in terms of aggregate productivity. Second, high levels of dispersion make poor matching outcomes less likely to occur. These predictions are evaluated using data about international technology differences and cross-country differences in educational attainment. Dispersion is shown explain much of cross country differences in total factor productivity. Furthermore, information about trade flows reveals that accounting for the level of dispersion in labor endowments improves the ability of the Heckscher-Ohlin-Vanek theorem to explain factor trade based on the endowment sizes alone.
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