We present a gravity model that accounts for multilateral resistance, firm heterogeneity and country-selectioninto trade, while accommodating asymmetries in trade flows. A new equation for the proportion of exporting…firms takes a gravity form: the extensive margin is also accected by...

Do better trade logistics reduce trade costs, raising a country´s exports? Yes, but the magnitude of the effectdepends on country size. Applying a new gravity model to a comprehensive logistics index, we …nd that anaverage-sized country would raise exports by about 46% after a one-standard...