A growing literature suggests that high-income countries export high-quality goods. Two hypotheses may explain such specialization, with different implications for welfare, inequality, and trade policy. Fajgelbaum, Grossman, and Helpman (JPE 2011) formalize the Linder (1961) conjecture that home...

We investigate the impact of trade integration between Canada and the United States on the degree of industrial specialization of the Canadian regions. Trade integration is captured through the decrease of trade-weighted tariffs that was boosted by the implementation of the Canadian-U.S. Free...