Financial development plays an important role in the structure of the trade balance and promoting economic development. Trade literature suggests that differences in economies’ endowments of labour, land, physical capital and technology explain the dynamics and patterns of international trade...

Recent research in international political economy has begun to explore the implications of producer heterogeneity for trade politics. Variations in productivity and size lead to systematic variations in both market and political behaviors. These similarly lead to systematic variations in policy...

On May 5, 2020, the U.S. Trade Representative announced plans to negotiate a free trade agreement with the United Kingdom. We use GTAP to model the economic impacts of this free trade agreement, exclusively focusing on the bilateral tariff elimination. We find that a standard GTAP model leads to...

This report explores the relationship between services trade policies and mark-ups at the firm level, taken as a measure of competitive pressure. Restrictive regulations are found to enable firms to charge higher mark-ups in a majority of services sectors, suggesting ample scope for...

Small and medium-sized enterprises (SMEs) play an important role in generating economic activity and employment in developing and developed countries. However, partly due to remaining at-the-border trade costs, SMEs continue to be less represented in international trade – as direct exporters...

This paper applies a structural framework to estimate production function coefficients, obtain firm-level markup estimates, and evaluate the impact of the trade liberalization that took place in Mexico in the period 1984-1990 on the profitability of the firms operating in the domestic market and...

This report presents evidence on how services trade restrictions influence the decisions and performance of firms engaged in international markets, drawing on micro-data from Belgium, Finland, Germany, Italy, Japan, Sweden, the United Kingdom, and the United States. It first describes the...

I study how trade liberalization, or more specifically, WTO accession by China in 2001, affects industry dynamics: entry, exit, and innovation in China. Using various identification strategies (DDD, IV, DD), I find that the trade liberalization has the following causal impacts: (1) in the short...

Firm-based approaches to international trade have revolutionized the study of trade politics. While the political economy of trade has conventionally emphasized the role of export propensity at the industry level in determining interests over policy outcomes, engaging in trade is an inherently...

In this paper, we show that a reduction in capital goods prices induced by trade policies can stimulate both investment and labor. We exploit a quasi-natural experiment in the form of a trade reform in Colombia to study how firms with differential exposure to reductions in capital goods tariffs...