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 presents a trade model with capital and labor as factors of production. The main contribution of this paper is that it considers a new type of firm heterogeneity, which is empirically relevant: firms in this paper differ with respect to their factor shares in production. Therefore,...

This paper uses firm-level data for Mexican exporters to understand how firm-level export decisions shape a country's aggregate exports. The data allows for a characterization of both the crosssectional distribution of Mexican exports, across destinations and across exporting firms, and of the...

In this paper, we examine the effects of liberalization on industrial location and national welfare in a framework of new economic geography. Specifically, we explicitly incorporate arbitrary trade costs in both differentiated-good and homogeneous-good sectors into a two-country model, and...

This paper develops a trade model with firm-specific quality heterogeneity in markets where firms face the threat of imitation and engage in limit-pricing strategies. Firms producing high-quality (high-price) products export, whereas firms producing lower-quality (lower-price) products serve the...

Based on a many-industry Chamberlinian-Ricardian trade model with iceberg trade costs, this note examines the impact of two modes of economic integration: a reduction in trade costs, and technical standardization due to information spillover. It is shown that these two modes of economic...

Quantifying the welfare effects of trade liberalization is a core issue in international trade. Existing frameworks assume perfect labor markets and therefore ignore the effects of aggregate employment changes for welfare. We develop a quantitative trade framework which explicitly models labor...

Trade facilitation policies intend to simplify administrative processes and accelerate the handling of shipments across borders. Recent research shows that these policies have substantial effects on trade flows. In this chapter, we discuss what the existing evidence for trade implies for the...

Cultural allegiances whether inherited, imposed or chosen, affect economic activity. Many of these cultural layers – ethnic background, religion, language, ideological orientation, and artistic interests – spill over national boundaries. Cultural ideas travel the world along many routes from...