We hypothesize that exports of differentiated products, which entail greater upfront costs, increase more as financial reforms take place. We find strong and robust empirical support of this hypothesis with a comprehensive set of measures of reforms encompassing the banking sector, interest...

I investigate whether the ‘granular’ behaviour of aggregate outcomes suggested by Gabaix (2011) is present in country exports by product. Using data for 11 EU countries over the 1988–2011 period, the results show that the idiosyncratic shocks to the main products may have significant...

Costs necessary to conform with rules and regulations governing market access (i.e. compliance costs) are uncertain prior to export or collection of information which is not cost free for an individual firm. In this paper, we extend the heterogeneous firm model of Melitz to analyze how an...

Despite the onset of globalization, year-by-year cross-country regressions of the gravity model usually suggest that the impediment of geographical distance on bilateral trade is rising, and not declining, over time. This effect of distance is dubbed the distance puzzle. In this paper, we argue...

Empirical findings from the gravity model using a bilateral data set of 23 OECD countries provide strong support for the network effect of FDI, migration, and the Internet on international trade. Further, the findings show differences in the network effect between the manufacturing and service...

Using two novel measures of bank-intermediated trade finance in Korea, this paper empirically assesses the effects of financial shocks on the availability of trade finance and finds that these effects are generally negative and last for at least three months, implying significant delays and...

We provide evidence showing that the degree of diversification of import sources of finely disaggregated commodities rises monotonically along the growth path. This result is robust to different measures of import diversification and the inclusion of a large set of additional control variables....

Using a rich database on Italian manufacturing firms, we test the hypothesis that self-selection mechanisms differ from market to market. We observe significant ex ante productivity differences between firms starting to export to distinct geographical areas. Country characteristics such as size,...

A panel data approach is used to investigate both the steady-state and the transitional impact of trade liberalisation on export performance within a sample of selected OECD countries. The results find trade policy to be a largely insignificant determinant of export performance. Domestic...

This paper tests the hypothesis that, in the presence of credit constraints, higher wealth inequality affects negatively the growth gains from trade liberalisation. Variations in the growth rate of value added–decomposed in the growth rate of the number of establishments and the growth rate in...