We demonstrate that the Varian (1980) model of sales has a unique Nash equilibrium when firms incur costly advertising to compete for informed consumers. The equilibrium is symmetric. In particular, with costly advertising, the asymmetric equilibria highlighted by Baye et al. (1992) do not arise.

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...