The production of export goods has become increasingly unbundled, and countries positioning to become more integrated in the global economy are increasingly looking toward global value chains. This paper uses the Organisation for Economic Co-operation and Development/World Trade Organization's...

How large are the estimated gains from trade from a reduction in trade costs in the heterogeneous firms Melitz (M) model compared with the Armington (A) and Krugman (K) models? Surprisingly little is known beyond the one-sector model. This paper analyzes this question using a global trade model...