Trade liberalization boosts plant productivity, challenging standard economic models.
Trade liberalization increases the average productivity of plants. More efficient firms export, and after trade liberalization, firms become more efficient on average. Data from Columbian plants shows that exporters are more productive than non-exporters, and trade liberalization boosts overall productivity. The standard model doesn't fully explain the data, as in reality, exporters are less productive than non-exporters before trade liberalization. This discrepancy is a puzzle for the model.