This paper provides first firm-level evidence on the links between income inequality within a country and the patterns of trade and export prices. We identify a theoretical mechanism behind these links, which relates income inequality to product quality and prices using a simple demand...

Over the last 20 years the border-effect literature repeatedly documented the trade-reducing effect of inter- and intra-national borders. Thereby, the sheer size and persistence of observed border effects from the beginning raised doubts on the genuine effect of underlying borders. However, when...

This paper presents novel empirical evidence on key predictions of heterogeneous firm models by examining stock market reactions to the Canada-United States Free Trade Agreement of 1989. Using the uncertainty surrounding the agreement's ratification, I show that the pattern of abnormal returns...

There is strong empirical evidence that countries with lower per capita income tend to have smaller trade volumes even after controlling for aggregate income. Furthermore, poorer countries do not just trade less, but have a lower number of trading partners. In this paper, I construct and...

We use Spanish firm-level data to test the hold-up model of global sourcing proposed by Antr s & Helpman (2004). We propose a novel representation of the model which guides us in bringing the theory to the data. We estimate a discrete choice model of firms' sourcing behavior, separately for the...

An astonishing 33 % of all export spells in Danish data turn out to be isolated single-month one-off export transactions. On average, for an export-active firm, one-off events generate 17 % of foreign sales. These patterns do not sit well with available trade models. To reconcile theory with the...

This paper uses micro-data from the World Bank Enterprise Surveys to investigate how foreign ownership affects the likelihood of manufacturers in developing countries to export and/or import both directly and in- directly. Applying propensity score matching to control for differences across...

We show that the effect of fixed costs on international trade is lower in industries with a high degree of vertical product differentiation. We extend an international trade model by endogenous quality investmetns and use both aggregate trade data and firm-level data to estimate gravity...