This paper examines the relationship between the credit constraints faced by a firm and the unit value prices of its exports. The paper modifies Arkolakis’s (2010) model of trade with heterogeneous firms by introducing endogenous quality and credit constraints. The model predicts that tighter...

Since 2003 German hospitals are reimbursed according to diagnosis related groups (DRGs). Patient classification in neonatology is based inter alia on birth weight, with substantial discontinuities in reimbursement at eight different thresholds. These discontinuities create strong incentives to...

In this laboratory experiment we study the use of strategic ignorance to delegate real authority within a firm. A worker can gather information on investment projects, while a manager makes the implementation decision. The manager can monitor the worker. This allows her to better exploit the...

This paper surveys the recent literature on CEO compensation. The rapid rise in CEO pay over the past 30 years has sparked an intense debate about the nature of the pay-setting process. Many view the high level of CEO compensation as the result of powerful managers setting their own pay. Others...

Although firms may face radically different production conditions, this dimension of firm heterogeneity is often overlooked. We model input demand across local factor markets, explicitly considering search costs which explain why firms care about both the price and availability of inputs. The...

The paper is devoted to an econometric analysis of learning foreign languages in all parts of the world. Our sample covers 193 countries and 13 important languages. Four factors significantly explain learning, two of which affect the broad decision to learn, while two concern as well the choice...

We study the effect of international trade and freeness of trade (openness) on interregional inequality within countries. We estimate a model derived from a structural economic-geography approach in which interregional inequality depends on weighted trade shares and trade costs. In addition to...

This paper studies the evolution of trade freeness and of the agglomeration of production, as well as their relationship, at the sectoral level in a group of EU countries. Our main objective is to test at the sectoral level the conclusions of previous aggregate analyses which find that an...

This paper estimates the effects of the EU enlargements in the 2000s for trade in parts and components and trade in final goods separately. A gravity model is applied to disaggregated trade data over the period 1999-2009 for trade between EU and OECD countries. The estimation approach accounts...

This paper proposes methods to incorporate firm heterogeneity in the standard IO-table based approach to portray the domestic segment of global value chains in a country. Using Chinese firm census data for both manufacturing and service sectors, along with constrained optimization techniques, we...