This paper studies how opening to trade affects economic growth in a model where heterogeneous firms can choose to adopt a new technology already in use by other firms. We characterize the equilibrium growth rate as a simple function of summary statistics
of the profit distribution - the ratio in profits between the average and marginal firm. Opening to trade increases the spread in profits through expanded export opportunities and foreign competition, induces firms to adopt new technologies more rapidly, and
generates faster economic growth. Quantitatively, opening to trade yields large increases in growth, but welfare effects are muted due to loss of variety and reallocation of labor away from production.
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