We show that exported products exit the US market sooner if they violate the Heckscher-Ohlin notion of comparative advantage. Crucially, this pattern is stronger when exporting country has a well-developed banking system, measured by a high ratio of bank credit over the GDP. Banks thus push...

We show that exported products exit the US market sooner if they violate the Heckscher-Ohlin notion of comparative advantage. Crucially, this pattern is stronger when exporting country has a well-developed banking system, measured by a high ratio of bank credit over the GDP. Banks thus push...

The question here is whether the dynamic effects of opening to trade will increase or decrease comparative advantage. When comparative advantage is based on the abundance or scarcity of something that is costly to acquire, one expects rational behavior to respond to a change in prices by...

We derive several cases of 'comparative advantage in nothing', which can be relevant for East Germany. The simplest case with little relevance is the HO assumption of identical technologies across regions implanted into the Ricardian model. The second is the case with full employment wages...

We study the determinants of comparative advantage in polluting industries. We combine data on environmental policy at the country level with data on pollution intensity at the industry level to show that countries with laxer environmental regulation have a comparative advantage in polluting...

When asked to name one proposition in the social sciences that is both true and non-trivial, Paul Samuelson famously replied: `Ricardo's theory of comparative advantage'. Truth, however, in Samuelson's reply refers to the fact that Ricardo's theory of comparative advantage is mathematically...

The theory of comparative advantage is at the core of neoclassical trade theory. Yet we know little about its implications for how nations should conduct their trade policy. For example, should import sectors with weaker comparative advantage be protected more? Conversely, should export sectors...

We study the determinants of comparative advantage in polluting industries. We combine data on environmental policy at the country level with data on pollution intensity at the industry level to show that countries with laxer environmental regulation have a comparative advantage in polluting...

The India–Sri Lanka Free Trade Agreement (ISFTA) was signed between India and Sri Lanka in December 1998 and came into operation in March 2000. It is now 10 years since this FTA has been signed and during this period the bilateral trade between these two economies has reached new heights...

In a Ricardian model with CES preferences and general distributions of industry efficiencies, the sources of the welfare gains from trade can be precisely decomposed into a selection and a reallocation effect. The former is the change in average efficiency due to the selection of industries that...