This paper develops an efficiency theory of contingent trade policies. We model the competition for a domestic market between one domestic and one foreign firm as a pricing game under incomplete information about production costs. The cost distributions are asymmetric because the foreign firm...

Recent trade theory in the Krugman (1980) tradition predicts that countries with larger market size enjoy higher levels of total factor productivity (TFP) – and equivalently of real per capita income or welfare – as a smaller fraction of spending on inputs is affected by trade costs....

Recent work by Anderson and van Wincoop (2003) establishes an empirical modelling strategy which takes full account of the structural, non-(log-)linear impact of trade barriers on trade in new trade theory models. Structural new trade theory models have never been used to evaluate and quantify...

One third of Chinese exporters sell more than ninety percent of their production abroad. We argue that this distinctive pattern is attributable to a wide range of subsidies that provide incentives to these “pure exporters.” We propose a heterogeneous-firm model in which firms exporting all...

This paper evaluates the effect on firm-level export outcomes of the Cash Incentive Scheme for Exports program provided by the Government of Nepal. The analysis utilizes customs-level data for 2011-14, combined with information on the subsidy payments made to individual firms provided by the...

We study the effect of subsidies subject to export share requirements (ESR) that is, conditioned on a firm exporting at least a given fraction of its output - on exports, the intensity of competition and welfare, through the lens of a two-country model of trade with heterogeneous firms. Our...

We estimate that the euro has increased trade within the eurozone by about 26 percent and trade between the eurozone and outsiders by about 12 percent on average for the years 2002-2005 compared to 1995-1998. The percentage increases were smaller for products that were exported every year during...

How exporters choose currency for their exports? Using highly disaggregated data on the population of Russian Federation exporting firms between 2005 and 2009 this paper studies the strategic determinants of currency invoicing decisions. Strategic morives embrace two occurrences in currency...

This paper investigates the domestic government's antidumping duty choice in an asymmetric information framework where the foreign firm's cost is observed by the domestic firm, but not by the government. To induce truthful revelation, the government can design a tariff schedule, contingent on...

If conventional instruments of strategic trade policy are unavailable, the system of foreign profit taxation and transfer price guidelines may serve as surrogate policy instruments. In this paper, I consider a model where firms from two countries compete with each other on a third market. I...