In theoretical trade models with variable markups and collective wage bargaining, export exposure may reduce the exporter wage premium. We test this prediction using linked German employer-employee data from 1996 to 2007. To separate the rent-sharing mechanism from assortative matching, we...

Does trade openness cause higher GDP per capita? Since the seminal instrumental variables (IV) estimates of Frankel and Romer [F&R](1999) important doubts have surfaced. Is the correlation spurious and driven by omitted geographical and institutional variables? In this paper, we generalize F&R's...