This paper provides evidence on the long-term impact of market potential on economic development. It derives from the New Economic Geography literature a structural stimation where the level of factors’ income of a country is related to its export capacity, labeled Market Access (MA) by...

In this paper, we estimate firm-level markups and test some micro-level predictions of a model of international trade with heterogeneous firms and endogenous markups. Our theoretical framework is an extended version of the Melitz and Ottaviano (2008) (MO) model that features both quality and...

Recent trade models with heterogenous firms have considerable consequences on the interpretation of gravity equations. Chaney (2008) shows that the effect of distance on trade margins incorporates three parameters: the elasticity of substitution between goods, the elasticity of trade costs with...