We develop a model of vertical innovation in which firms incur a market entry cost and position themselves in the quality space. Once established, firms compete monopolistically in the quality space, selling to consumers with heterogeneous tastes for quality. Exogenously growing productivities...

The recent literature on firm-to-firm trade has documented salient empirical regularities of the buyer-seller network. We propose a simplistic re-interpretation of the classical Krugman (1980) model that accounts for surprisingly many of the empirical regularities. This re-interpretation relies...

The recent literature on firm-to-firm trade has documented salient empirical regularities of the buyer-seller network. We propose a re-interpretation of the classical Krugman (1980) model that accounts for surprisingly many of these empirical regularities. Our re-interpretation relies on...