Larch, Mario; Norbäck, Pehr-Johan; Sirries, Steffen; … - 2013
and Head, 2008). To solve this distance puzzle, we use the recently developed gravity equation estimator from Helpman … time. The distance puzzle thus arises from a growing bias of OLS estimates. The latter is explained by globalization more … heterogeneous exporting firms. Furthermore, we show that including zero-trade flows cannot solve the distance puzzle when using HMR …