Ramondo, Natalia; Rappoport, Veronica; Ruhl, Kim J. - In: Review of Economic Studies 80 (2013) 4, pp. 1582-1621
In this article, we analyse the firm's choice between serving a foreign market through exports or through foreign affiliate sales in an environment characterized by country-specific shocks to the cost of production. Our model predicts that country pairs with less-correlated output fluctuations...