Dynamic models of plant entry, exit, and intra-industry reallocation

Extensive theory and evidence argue that dynamics are a crucial determinant of firm behavior.  Despite this, the standard models of intra-industry firm behavior (e.g. Eaton and Kortum 2002) do not explicity allow for innovation and firm entry and exit over time. Hence, "simulations" based on these models must be regarded as counterfactual scenarios.  These counterfactuals lack a dynamic general equilibrium interpretation.  This limits their informative power for the kinds of questions that interest policy makers (e.g. the effects of trade liberalization).  I am interested in models that incorporate and explicit role for producer-level entry and exit over time.  (View work in progress)