Recent trade theory in the Krugman (1980) tradition predicts that countries with larger market size enjoy higher levels … spending on inputs is affected by trade costs. However, in cross-country data, there is no such positive correlation between … is implicitly assumed in the usual formulation of aggregate CES production functions. Whether trade liberalization …

. Whereas trade does not affect the firm-internal assignment of workers to tasks in a setting with fully flexible wages, it … consequences for firm-level productivity, if low-skilled wages are fixed by a minimum wage. In this case, trade leads to higher per …