Proper measurement and aggregation of trade costs is of paramount importance for sound academic and policy analysis of the determinants - particularly those of policy - of economic outcomes. The international trade profession has witnessed significant new developments, both on the theoretical...

This paper analyses the effects of Agenda 2000's policy reform on the stocks of outward FDI to the European Union member countries. In a three-factors proximity-concentration New Trade Theory model we indentify the channels of influence on the FDI decision. In the empirical part, we estimate a...

Trade economists have for long considered gravity models to estimate unexhausted potentials for bilateral trade. Similar to the discrepancy between "normal" and "actual" bilateral trade, one may ask the question about the difference between "normal" and actual bilateral multinational activity....

One of the oldest and largest literatures in empirical economics is concerned with the estimation of demand and supply of goods, services, and factors across national or subnational borders (see Leamer and Levinsohn, 1995). The respective empirical models specified and estimated are often...

Since the revival of the gravity literature in the early nineties most work has been done with cross-section data. Just a few more recent contributions made use of panel data. So far that research left open the question whether to treat time and country effects as random or fixed. This note...