This Paper argues that a geographical perspective is fundamental to understanding comparative economic development in the context of globalization. Central to this view is the role of agglomeration in productivity performance; size and location matter. The tools of the new economic geography are...

The theory of the firm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms' integration opportunities affect the way institutions determine international trade patterns. We find...

International trade models typically assume that producers in one country trade directly with final consumers in another. In the real world, of course, trade can involve long chains of potentially independent actors who move goods through wholesale and retail distribution networks. These...

The increased integration of the economies of Central and Eastern Europe with the European Union (EU) as the Europe Agreements are progressively implemented, is projected to have a significant impact on trade flows with Spain, as exports and imports grow very rapidly, albeit starting from a very...

The theory of the firm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms’ integration opportunities affect the way contract enforcement institutions determine international...

This paper seeks to integrate more closely the theory of optimum currency areas with the theory of international trade. The currency area is considered as a continuous variable ranging from zero to one: zero if there is no enlargement, and some positive value otherwise, corresponding exactly to...

The paper estimates the causal effect of trade liberalisation on aggregate productivity through mechanisms related to firm selection. The construction of a bridge in 2000 across the Öresund Strait linking Copenhagen with Malmö, Sweden's third largest city, provided a natural experiment with...

The “distance effect” measuring the elasticity of trade flows to distance has been to be rising since the early 1970s in a host of studies based on the gravity model, leading observers to call it the “distance puzzle”. We review the evidence and explanations. Using an extensive data set...

We consider a Heckscher-Ohlin model in which goods and factors of production can be traded, but trade involves transactions costs. Goods trade alone will not equalize factor prices, so there is an incentive for trade in factors of production. Whether goods or factors are traded depends on...

Convergence in per capita income across countries turns on whether technological knowledge spillovers are global or local in a large class of models. This Paper estimates the amount of spillovers from R&D expenditures in major industrialized countries on a geographic basis. A new data set is...