We present a gravity model that accounts for multilateral resistance, firm heterogeneity and country-selection into trade, while accommodating asymmetries in trade flows. A new equation for the proportion of exporting firms takes a gravity form, such that the extensive margin is also affected by...

This paper shows both theoretically and empirically how raw material rich countries use export restrictions upstream to give manufacturing sectors downstream a competitive advantage. For young and relatively small industries this can be seen as a type of infant industry protection that takes...