This paper explores the determinants of firm survival in export markets. Our theoretical framework includes a geometric Brownian motion for firm profitability, market-specific sunk and fixed exporting costs that are common across firms, and firm- and market-specific profitability shifters that...

If emerging markets are to achieve their objective of joining the ranks of industrialized, developed countries, they must use their economic and political influence to support radical change in the international financial system. This working paper recommends John Maynard Keynes's "clearing...

Combining Balassa–Samuelson effects with strategic complementarities between prices of tradables and non-tradables yields a novel determinant of tradables’ prices. A larger productivity difference between tradables and non-tradables raises the non-tradables’ price. With strategic...

We develop a heterogeneous-firms model with trade in goods, labor mobility and credit constraints due to moral hazard. Mitigating financial frictions reduces the incentive of mobile workers to migrate to one region such that an unequal distribution of industrial activity becomes less likely....

This paper examines international trade and inspection involving tainted products in a model of quality choice, facing fears that globalization is the cause of numerous food incidents. Particularly, we ask the following questions: (i) What are the conditions under which foreign firms choose to...

Mark-ups and the degree of trade openness vary substantially across sectors. This paper builds a multi-sector endogenous growth model to study the influence of trade liberalisation on innovation and, by extension, on sector and aggregate productivity growth under sectoral heterogeneity. I find...

We develop a new model of multi-product firms which invest to improve the perceived quality of both their individual products and their brand. Because of flexible manufacturing, products closer to firms' core competence have lower costs, so firms produce more of them, and also have higher...

This paper explores the impact of input trade liberalization on imported input and exported product prices. Using Chinese transaction data for 2000–2006, we capture causal effects between exogenous input tariff reductions and within firm changes in HS6-traded product prices. For...

In this paper, we provide causal evidence that firms serve new markets which are geographically close to their prior export destinations with a higher probability than standard gravity models predict. We quantify the impact of this spatial pattern using a data set of Chinese firms which had...

We present a simple and tractable trade model of heterogeneous firms, endogenous quality choice, and endogenous markups. A key feature of the model is that competition not only lowers the cost cut-off between the firms that produce and those that exit, but it also raises the scope for quality...