Exporters’ performance in a particular market may affect their future exports to the rest of the world. Importers may base their future transaction decisions upon the information revealed by exporters’ past performance in other countries. Similarly, exporters acquire valuable information on...

In this paper, we analyze the effect of reducing import tariffs on intermediate inputs and final goods on the wage skill premium within firms in Indonesia – a country with a high share of unskilled workers. We present a new finding that reducing input tariffs reduces the wage skill premium...

How does trade liberalization affect wages? This is the first paper to consider in theory and data how the impact of final and intermediate input tariff cuts on workers’ wages varies with the global engagement of their firm. Our model predicts that a fall in output tariffs lowers wages at...

This paper estimates the effects of trade liberalization on plant productivity. In contrast to previous studies, we distinguish between productivity gains arising from lower tariffs on final goods relative to those on intermediate inputs. Lower output tariffs can produce productivity gains by...

The negotiations on trade in services at the WTO have so far produced little liberalization beyond levels unilaterally undertaken by countries. One reason is the neglect of the traditional negotiating principle of reciprocity. In particular, there has been a failure to exploit the scope built...

As each new round of multilateral trade negotiations approaches, there is a demand for a negotiating rule that would give credit for autonomous liberalization. This Paper shows that the desirability and feasibility of such a rule depends on when it is instituted. A credit rule established at the...

In the case of natural monopolies there tends to be a trade-off between a higher quality of output provided by private firms, and a better access for poor consumers provided by public firms. This is partly the reflection of differences in objectives by private and public firms. The former tend...

To study the effects of tariffs on GDP one needs import demand elasticities at the tariff line level that are consistent with GDP maximization. These do not exist. We modify Kohli’s (1991) GDP function approach to estimate demand elasticities for 4625 imported goods in 117 countries. Following...

This Paper estimates the agglomeration benefits that arise from vertical linkages between firms. The analysis is based on international trade and economic geography theory developed by Krugman and Venables (1995). We identify the agglomeration benefits of the spatial variation in firm level...

Information is costly to acquire in trade and financial markets, especially across international borders. Sellers and buyers rely on information and experiences of other firms, including from business partners located in other countries. This Paper identifies three channels through which...