This paper examines the relationship between the credit constraints faced by a firm and the unit value prices of its exports. The paper modifies Arkolakisś (2010) model of trade with heterogeneous firms by introducing endogenous quality and credit constraints. The model predicts that tighter...

Exporters tend to be more productive than non-exporting firms, and uncovering the extent of these productivity differentials as well as causes thereof has long been one of the core topics in the literature. This paper focuses on the issues pertaining to robust empirical modeling of the intricate...

Due to markup distortions, in international trade models with monopolistic competition and heterogeneous firms the market equilibrium is inefficient unless demand exhibits constant elasticity of substitution. When it does not, global welfare maximization generally requires policy intervention...

Price stickiness - the tendency of prices to remain constant despite changes in supply and demand - has been linked to firms' unwillingness to pay the costs entailed in setting, implementing, and advertising new prices. However, there is little consensus on the size and importance of these...

We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002-2006, we empirically establish that firms allocate activity across products in...

This paper investigates optimal emissions taxation under imperfect competition in a durable good industry, where products are sold (instead of rented). As a benchmark, attention is paid to the special case of monopoly with exogenously given product durability. In line with previous literature,...

Many durable products cannot be used without a contingent consumable product, e.g. printers require ink, iPods require songs, razors require blades, etc. For such products, manufacturers may be able to lock-in consumers by making their products incompatible with consumables that are produced by...

Many durable products cannot be used without a contingent consumable product, e.g. printers require ink, iPods require songs, razors require blades, etc. For such products, manufacturers may be able to lock-in consumers by making their products incompatible with consumables that are produced by...

We express the idea of classical competition in a statistical equilibrium model, where the tendency for competition to equalize profit rates results in an exponential power (or Subbotin) distribution. The model supports and extends recent evidence on the Laplace distribution of growth rates in...

We argue that the complex interactions of competitive heterogeneous firms lead to a statistical equilibrium distribution of firms? profit rates, which turns out to be an exponential power (or Subbotin) distribution. Moreover, we construct a diffusion process that has the Subbotin distribution as...