Establishing a robust causal relationship between trade and income has been difficult. Frankel and Romer (1999) use geographic instruments to identify a positive effect of trade on income. Rodriguez and Rodrik (2000) show that these results are not robust to controlling for missing variables such as distance to the equator or institutions. This paper solves the missing variable problem by gener...

The negative effect of distance on bilateral trade is one of the most robust findings in international trade. However, the underlying causes of this negative relationship are less well understood. This paper exploits a temporary shock to distance, the closing of the Suez canal in 1967 and its reopening in 1975, to examine the effect of distance on trade and the effect of trade on income. Time s...

This research assesses the effects of mycotoxins regulations on international trade flows. Mycotoxins regulations reflected in the mandatory maximum residue limits impose costs on the producers that could take the form of both variable and fixed costs. Little empirical research exists on the effects of food safety regulations on international trade flows. The same holds true for the assessment ...

In data, bilateral trade is strongly correlated with bilateral GDP comovement. This paper examines whether trade in intermediate inputs explains this empirical fact. I integrate input trade into a many country, multi-sector model and calibrate the model to data on bilateral input-output linkages. With estimated productivity shocks, the model generates an aggregate trade-comovement correlation 3...

We bring together time series data on trade, production, and input-use to compute the value added content of trade over the past four decades (1970-2009). Comparing the ratio of value added to gross exports, we measure changes in production fragmentation for the world as a whole, individual countries, and bilateral trade partners. For the world, the share of value added in trade falls by 10 to ...

Digitization has greatly expanded the scope of trade, and with it trade law. But regulatory framework, although growing in bilateral regional fora, is highly dynamic remains fragmented, increasing challenges facing digital

Trade policy barriers are only one element of the overall trade costs. Due to the decrease in the influence of tariff barriers on trade, institutional barriers may be increasing in relative importance. In this line, this paper compares and quantifies the impact that a number of institutional and policy trade barriers have on bilateral trade flows. Results indicate that institutional trade barri...

This paper investigates the specialization pattern of countries in terms of technology and exports and examines the role of innovation intensity and technological opportunity in determining bilateral trade at the aggregate and sectoral level. Some of the major ndings are as follows: At the aggregate level, innovation intensity and technological opportunity has positive and signi cant impact on ...