I provide an equilibrium analysis of “selection markets”: where consumers not only vary in how much they are willing to pay, but also in how much they cost to the seller. The model provides a joint explanation for three empirical phenomena: low uptake of existing products, slow demand for...

This paper investigates theoretically and empirically the endogenous investment decision of firms conditioning on export decision. It shows that theoretically, whatever the form of preferences, firms that start exporting invest more and grow more than the others. However, it is shown that when...