To serve foreign markets, firms can either export or set up a local subsidiary through horizontal Foreign Direct Investment (FDI). The conventional proximity-concentration theory suggests that FDI substitutes for trade if distance between countries is large, while exports become more important...

We empirically examine the heterogeneity in the effects of multiple dimensions of distance on trade across detailed product groups. Using finite mixture modeling on bilateral trade data at the 3-digit SITC level, we endogenously group product categories into an, a priori unknown, number of...

This paper conducts the first general equilibrium analysis of the role of entry, exit and profits in industry dynamics. The benefit of our model is twofold. First, to discriminate between entrants’ role of performing the entrepreneurial function of creating disequilibrium and the conventional...

The main contribution of entrepreneurship theory to economics is to provide an account of market performance in disequilibrium but little empirical research has examined firm entry and exit in this context. We redress this by modelling the interrelationship between firm entry and exit in...

Today’s global world is characterized not only by a high volume ofinternational trade and foreign investment relativeto national income, but also by a changed composition of that tradetowards a greater fraction of trade in inputs andcapital goods and outsourcing of production.. Emphasized is...

A recent literature has emerged providing compelling evidence that a major shift in the organization of the developed economies has been taking place: away from what has been characterized as the <I>managed economy</I> towards the <I>entrepreneurial economy</I>. In particular, the empirical evidence provides...</i></i>

This paper studies an intermediated market operated by middlemen with high inventory holdings. I present a directed search model in which middlemen are less likely to experience a stockout because they have the advantage of inventory capacity, relative to other sellers. The model explains why...

Using a comprehensive international trade data set we investigate empirical regularities (known as Zipf’s Law or the rank-size rule) for the distribution of the interaction between countries as measured by revealed comparative advantage. Using the recently developed estimator by Gabaix and...

It is conceivable that the "whether to buy" and "how much tobuy" decisions in the purchasing process of households areinfluenced by the inventory process. In this paper we thereforeput forward a model for consumption, where we rely on establishedeconomic theory. We incorporate this model in a...

This discussion paper resulted in the article Broad and Narrow Bracketing in Gift Certificate Spending in the 'European Economic Review' (2014). Volume 66, pages 284-302.<P> We survey 1,050 consumers who have just redeemed one or more open loop gift certicates to learn whether they view gift...</p>