In a representative sample of Italian manufacturing firms, we find a robust negative correlation between productivity (however measured) and sales to low-income destinations as a share of total exports. This fact seems at odds with the heterogeneous-firms literature, which predicts...

We argue that the large and growing North-South trade imbalances arisen over the last three decades may have exacerbated wage inequality worldwide. In particular, we show that in a standard Heckscher-Ohlin setup with a continuum of goods, a Southern trade surplus is associated with higher skill...

We propose a theoretical foundation for a link between North-South trade imbalances and skill upgrading. We provide robust support for our theory using a panel of US manufacturing industries observed between 1977 and 2005. Our results suggest that the impact of the US trade deficit on the...

We study, both theoretically and empirically, how trade imbalances affect the structure of countries' exports and wage inequality. We show that, in a Heckscher-Ohlin model with a continuum of goods, a Southern (Northern) trade surplus leads to an increase (reduction) in the average skill...