One of the top priorities to improve the European Union's growth performance is the creation ofsingle market for services. The directive on services adopted by the Parliament and the Council by the end of 2006 aims at removing barriers to the free movement of service providers on the internal...

Innovations in information- and telecommunication technology render the proximity requirement between business partners obsolete and make business service outsourcing via cross-border trade more feasible. Although the (service-led) growth prospects have been widely discussed, evidence at the...

The new trade theory explains several features of the current development of EU's trade with CEECs better than the Heckscher-Ohlin model. In 1997, CEECs participated in the European economy with levels of intraindustry trade comparable to peripheral EU countries. However, this induced increased...

A 2-country model with two groups of agents, workers and capitalists is presented in which economic integration results in an initial phase of catch-up, where the less industrialised country experiences the rise in both capital and labour income. Then, after a certain level of integration has...

We address the trade effect of restrictive product standards on the margins of trade, by matching a detailed panel of French firm exports with a new database compiling the list of Sanitary and Phyto-Sanitary regulatory measures that have been raised as a concern in dedicated committees of the...

This paper introduces a model of limited consumer attention into an otherwise standard new trade theory model with love-of-variety preferences and heterogeneous firms. In this setting, we show that trade liberalization needs not be welfare enhancing if the consumers' capacity to gather and...

This paper deploys a dynamic extension of the Melitz (2003) model to generate predictions on export market exit and firm survival in a setting where firms endogenously make exit decisions. The central driver of the model dynamics is the inclusion of exogenous economy wide technological progress....

This paper develops an analytically solvable new economic geography model of the 'footloose entrepreneur' class in which not only skilled labor is mobile, but also unskilled labor. Allowing unskilled labor to move freely between different regions increases the agglomeration incentive of skilled...

This paper explores the role of country asymmetries for trade and industrial policies with heterogeneous firms. Our analysis delivers a number of novel results. First, trade policies, infrastructure policies and industrial policies which improve the business conditions in one country have...

This paper shows that subsidy competition may be efficiency enhancing. We model a subsidy game among two asymmetric regions in a new trade model, where capital can freely move among regions, but capital rewards are repatriated. We study subsidy competition, starting from an equilibrium where the...