We propose a short-run theory of the extensive margins of trade, comprising the standard international extensive margin and a novel domestic extensive margin. The domestic extensive margin allows identification of globalization and specific policy effects not properly identified in previous...

This paper empirically investigates the effect of the EU-South Korea free trade agreement (FTA) on manufacturing trade flows. By applying a state-of-the-art structural gravity model with intranational (i.e., domestic) trade and using disaggregated data, we quantify both the trade impact and the...