We identify the impact of local firm concentration on incumbent performance with a quasi natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions...

This paper models the relationship between countries' distance from global economic activity, endogenous investments in education and economic development. Firms in remote locations pay greater trade costs on both exports and intermediate imports, reducing the amount of value added left to...

This paper models the relationship between countries’ distance from global economic activity, endogenous investments in education, and economic development. Firms in remote locations pay greater trade costs on both exports and intermediate imports, reducing the amount of value added left to...

There has been a shift, in recent years, in the understanding of the process of development. It is not a switch (as often portrayed) from a state-dependent view of development to a market-reliant view. Rather, it involves rejecting a "blood, sweat and tears" view of development in favour of...

This paper estimates a structural model of economic geography using cross-country data on per capita income, bilateral trade, and the relative price of manufacturing goods. More than 70% of the variation in per capita income can be explained by the geography of access to markets and to sources...

Standard indicators of economic success leave out many aspects of development that are crucial to the well-being and freedom of citizens. We have to examine critically the ends as well as the means involved in development strategies. The impact of public education, health care, social security,...

This paper investigates the determinants of countries’ export performance looking in particular at the role of international product market linkages. We begin with a novel decomposition of the growth in countries’ exports into the contribution from increases in external demand and from...

This paper presents a model of social learning about the suitability of local conditions for new business ventures and explores its implications for the microeconomic patterns of economic development. I show that: i) firms tend to ‘rush’ into business ventures with which other firms have had...

As Weber (1904) recognized, Calvinistic beliefs about predestination may constitute a powerful incentive for good works; an individual wishes to receive assurances about her future prospects of salvation, and good works may provide a positive signal about such prospects. These beliefs can in...

We analyse how German tourists react to unanticipated shocks that alter their risk perception of selected tourism destinations. Using a difference-in-difference strategy which flexibly accounts for macroeconomic conditions and also addresses potential problems of serial correlation, we isolate...