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We show that traditional gravity variables play a significant role in explaining trade flows related to global value chain participation. We find evidence that cooperation costs - measured by linguistic and geographical proximity - are more relevant for trade that reflects cross-border...
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benchmark calibration, we estimate that the capital misallocation induced by these barriers reduces World GDP by 7%, compared to …-country inequality: the standard deviation of log capital per employee is 80% higher than it would be in a world without barriers to …
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