This paper develops a gravity model to explain different components of imports. It is shown that specific variables from competing trade theories affect each component differently: As economic sizes or relative factor endowments become similar, the volume of intra-industry imports, especially...

I examine the varying responses of countries to foreign trade and direct investment liberalization on spatial concentration of their economic activity by taking into consideration moderating factors such as their market size and level of economic development. I argue that liberalization...

The paper analyzes the increase in transition countries’ exports to their non-traditional trade partners. It uses four different measures of product differentiation to find out the extent that the increase in product variety explains this phenomenon. It is found that opening up to new trade...

The increase in exports to market economies is a good sign, but it is not conclusive about the extent of restructuring of production technologies experienced in transition countries. This paper explores the source of the increase with an analysis of their exports' quality, interprets the results...

The slow pace of multilateral negotiations has given a greater impetus to regional trade arrangements (RTA) as countries are eager to take advantage of welfare enhancing trade creation effect of trade liberalization. At the same time, this approach raises concerns as due their discriminatory...

Liberalization increases competitive pressures on domestic firms, creating incentives for reducing costs of production through technological progress. Through this channel, backward countries get a chance to narrow the technological gap with advanced countries. In this paper, the case of...

The paper analyses the distribution of unit values in clothing exports and imports to find results that are consistent all mainstream trade theories. Although richer countries on average export and import higher quality products, they import and export over a larger range of quality levels that...

After an overview of the literature on cultural differences acting as trade barrier, and examining the data on how European companies deal with these differences, cross-cultural literacy through learning foreign languages is suggested as an alternative to the practice of hiring immigrants. A...

After a short review of recent developments in gravity modeling and an overview of the liberalization agreements in Europe, this paper measures the trade creation and diversion effects of major European agreements based on the results of a correctly specified triple-indexed gravity model with...