We analyze the effects of the unprecedented rise in trade between Germany and the East - China and Eastern Europe - in the period 1988 - 2008 on German local labor markets. Using detailed administrative data, we exploit the cross-regional variation in initial industry structures and use trade...

We analyze how globalization has affected the sectoral anatomy of regional growth in Germany over the period 1978-2008. The aggregate German economy is characterized by a secular decline of manufacturing and a rise of modern service industries. This trend - also known as Petty's law - is not...

This paper offers a new mechanism to explain de-industrialisation in response to a price increase of the manufactured good. In our trade model, one sector (agriculture) is perfectly competitive while the other (manufacturing) is monopolistically competitive. Both industries use skilled and...

We investigate the causal impact of equity market liberalizations on sectoral export performance across 91 countries (1980 - 1997). The increased availability of external finance has boosted trade of industries that intensively use relationship-specific inputs, and lowered exports of industries...

We develop a theory of a firm in an incomplete contracts environment which decides on the complexity, the organization, and the global scale of its production process. Specifically, the firm decides i) how many intermediate inputs are simultaneously combined to a final product, ii) if the...

The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a novel framework to address this question at three...

We consider a property rights model of a firm with two heterogeneous suppliers. The headquarters determine the firm's organizational structure, and we analyze which sourcing mode (outsourcing or vertical integration) is chosen for which of the asymmetric inputs. If suppliers' investment choices...

There has been vast interest in the distribution of city sizes in an economy, but this research has largely neglected that cities also differ along another fundamental dimension: age. Using novel data on the foundation dates of more than 10,000 American cities, we find that older cities in the...

Using comprehensive data for German establishments, we estimate plant-evel production functions to analyze if cultural diversity affects total factor productivity. We distinguish diversity in the establishment's workforce and in the aggregate labor force of the region where the plant is located....

Why are better educated and more risk-friendly persons more mobile across regions? To answer this question, we use micro data on internal migrants from the German Socio- Economic Panel (SOEP) 2000 - 2006 and merge this information with a unique proxy for region-pair-specific cultural distances...