This paper analyzes whether complexity, measured by the number of skilled tasks that are performed in production, explains countries commodity trade structure. We modify the Romalis (<link/>) model to incorporate advantage differences in complexity across commodities together with differences in the...

Contrary to the prevailing interpretation, this paper shows that the central models of trade with heterogeneous firms (<link>Melitz 2003</link>; <link>Bernard et al. 2003</link>) exhibit ambiguous predictions for the exporter productivity premium. This prospect arises because of differences between theoretical and...

In this paper, we offer an explanation why globalization (falling trade costs) may increase the government incentive to block foreign takeover of domestic firms and increase its incentive to allow mergers among national firms. This creation of `national champions' occurs not only because the...

This study analyzes the impact of opening up markets on the diffusion of flexible manufacturing in a general equilibrium framework. With flexible manufacturing, suppliers can service a range of downstream industries and do not have to be concerned about being held up. Instead, the vertical...

Large distance and border effects on trade flows in some industries may result from the collusive division of geographic markets. In the Brazilian cement industry, traditional gravity equations fit the data well, yet limited regional flows are due to firms' strategic behaviour. Thanks to a...

Some cultural goods are consumed socially and are characterized by the same consumption network externalities as languages. Also, producers of new cultural goods in any one country draw on the stock of ideas generated by previous cultural production in all countries. For such goods, costless...

Recent trade models with heterogeneous firms have changed the interpretation of gravity equations. Chaney (2008) shows that the effect of distance on the number of exporters and average exports depends on key parameters characterizing the elements of market structure. We use firm-level export...

We examine the dynamics of ideas production and knowledge-productivity relationship in a panel of 19 OECD countries. A new data set of triadic patents is used. We rigorously address the issues of cross-country heterogeneity and endogeneity. Domestic and foreign ideas stocks exert positive but...

We develop a multi-country model with imperfect labour markets to study the effect of labour market frictions on bilateral trade flows. We use a framework that allows for goods trade and capital mobility and show that labour market imperfections exert opposite effects in the absence of capital...

This paper analyzes the link between firm exports and the competitive environment in foreign markets. We derive a theory-based econometric specification linking market-specific exports to foreign demand and the degree of a market's `crowdedness,' which depends on the number and efficiency of...