Transaction costs are a major reason why international trade flows are much smaller than traditional trade theory would … suggest. Trust between trading partners lowers transaction costs and may therefore enhance trade. The empirical analysis of … this paper shows that more trust leads to more trade so that part of the mystery of missing trade can be attributed to the …

The purpose of this paper is twofold. First, we explore empirically to what extent the determinants of trade in … services differ from those of trade in goods. Second, by the use of instrumental variables, we explore potential … complementarities between bilateral trade in goods and bilateral trade in services. Using a gravity framework, the main results show …