This paper explores the role of country asymmetries for trade and industrial policies with heterogeneous firms. The analysis delivers a number of novel results. First, trade policies, infrastructure policies and industrial policies which improve the business conditions in one country have...

The risk of market exit that business firms face is significant and differs widely across countries. This paper explores the links between countries’ business conditions and the exit risk at the country level. We set up a general equilibrium model which allows us to derive sharp predictions...