This paper intends to combine two fields in the economic literature by examining empirically the FDI pattern – horizontal versus vertical – within the European Union and the relevance of trade integration as a potential determinant of investment flows over the period 1995-2009. We capture...

With the availability of international value added trade data it has become evident that gross export data and value added data do not provide the same information. Although gross exports crosses national borders and is the target of trade policy, value added data tell us what fragment in the...

Using annual data for the period 1992-2012, this paper examines trade flows between China and its main trade partners in Asia, North America and Europe, and whether increasing trade has led to industrial structural adjustment and changes in China's trade patterns. The analysis is based on both...

The fragmentation of production across borders allows firms to make and export final goods, or to perform only intermediate stages of production by processing imported inputs for re-exporting. We examine how financial frictions affect companies' choice between processing and ordinary trade –...

Quantifying the welfare effects of trade liberalization is a core issue in international trade. Existing frameworks assume perfect labor markets and therefore ignore the effects of aggregate employment changes for welfare. We develop a quantitative trade framework which explicitly models labor...

Previous empirical research has assumed that goods trade responds to goods trade preferentialism only, while other forms of preferentialism – such as services trade or investment preferentialism – are irrelevant for goods trade. This paper provides novel evidence for the gains from a broader...

Using a novel common econometric specification, we examine the measurement of three important effects in international trade that historically have been addressed largely separately: the (partial) effects on trade of economic integration agreements, national borders, and bilateral distance....

Recent empirical studies have been searching for evidence on and driving forces for offshoring. Frequently, this has been done by analyzing gross trade flows related to offshore activities using gravity equations augmented by ad hoc measures of supply-side country differences. This paper...

The debate on trade wars and currency wars has re-emerged since the Great recession of 2009. We study the two forms of non-cooperative policies within a single framework. First, we compare the elasticity of trade flows to import tariffs and to the real exchange rate, based on product level data...

This paper identifies a “border” effect in the absence of a border. The finding that trade between East- and West-Japan is 23.1 to 51.3 percent lower than trade within both country parts, is established despite the absence of an obvious east-west division due to historical borders, cultural...