We analyze local content requirement (LCR) and tariff in a two-country model of vertical market-structure with endogenous foreign direct investment (FDI). The foreign firm chooses whether to export or to undertake FDI. The host country anticipates the potential for FDI and selects tariff with or...

In this paper we follow recent developments of panel data studies and explicitly allow for the existence of unobserved common time-specific factors where their individual responses are also allowed to be heterogeneous across cross section units. In the context of this extended panel data...

The aim of the present paper is to apply a Markov Switching model to check the characteristics of the Brazilian demand for imports equation based on annual data from 1947 to 2002 and on quarterly data from 1978:I to 2002:II. The results show that this model satisfactorily describes the...

This paper examines the hypothesis that a greater stock of migrants in New Zealand from a particular country leads to more trade between that country and New Zealand. The literature suggests that migrants can stimulate trade by lowering transaction costs, and by bringing with them preferences...

This paper investigates the effect of exchange rate volatility on US-UK bilateral trade flows. As part of econometric problems arising from a generated variable, we consider a special case when an ARCH type auxiliary model is used to measure uncertainty in the exchange rate and discuss a...

This paper contributes to the debate on trade and wages by estimating a GNP function for the United Kingdom using data for the period 1975-1999. Consistent with standard trade theory the GNP function treats factor supplies and output prices as exogenous and factor prices and output supplies as...

Since the seminal work of Krugman (1979), product variety has played a central role in models of trade and growth. In spite of the general use of love-of-variety models, there has been no systematic study of how the import of new varieties has contributed to national welfare gains in the United...

The objective of this paper is to provide estimates of import demand and export supply elasticities for around 4200 goods (six digit of the Harmonized System) in 117 countries. The empirical methodology follows the GDP function approach of Kohli (1991), which allows sufficient flexibility in...

Time is money, and distance matters. We model the interaction of these truisms, and show the implications for global specialization and trade: products where timely delivery is important will be produced near the source of final demand, where wages will be higher as a result. In the model,...

We investigate the relationship between exports and productivity in the Turkish apparel and motor vehicle and parts industries from 1990-1996, using two different models for plant-level panel data. In the first model, we examine the effect of past export status on current productivity both with...