To quantify trade frictions, we examine multiproduct exporters. We build a flexible general-equilibrium model and estimate market entry costs using Brazilian firm-product-destination data under rich demand access cost shocks. Our estimates show that additional products farther from firm’s core competency come at higher production costs, but there are substantive economies of scope in costs. Mar...

We use microdata collected at the border and store to characterize price impact of recent US trade policy on importers, exporters, consumers. At border, import tariff pass-through is much higher than exchange rate pass-through. Chinese exporters did not lower their dollar prices by much, despite appreciation dollar. By contrast, significantly lowered affected foreign retaliatory tariffs. In sto...

Why does the current wave of globalization create more public concern/opposition than previous rounds of trade liberalization? This paper identifies a key difference between globalization and trade liberalization that could be responsible for it. It is shown that while both globalization and trade liberalization create inter-sector income distribution, the former also creates intra-sector incom...

Using a long dataset on openness and productivity this paper tests the influence of openness on TFP growth and per capita growth since 1870 for 16 industrialized countries. It is shown, in simple regressions, that growth is by and large independent of openness. However, once the interaction between openness and foreign knowledge is allowed for, productivity is positively affected by openness. J...

This paper considers a new-product firm’s choice between exporting and foreign direct investment (FDI) to access foreign markets. We find that, when quality is unknown to buyers, the firm may choose FDI over exporting to signal quality, even though FDI is a costlier mode of access than exporting. We then use the model to study the effect of local labor requirement policy imposed by the host cou...

This paper proposes a new test of the Protection for Sale (PFS) model by Grossman and Helpman (1994). Unlike existing methods in the literature, our approach does not require any data on political organizations. We use quantile and quantile IV regressions to do so using the data from Gawande and Bandyopadhyay (2000). Surprisingly, the results do not provide any evidence favoring the PFS model. ...

The consequences of free trade are investigated in an international duopoly under horizontal di¤erentiation and convex transportation costs. It is shown that the smaller country may bene...t from trade if it is su¢ciently small to allow for a signi...cant volume of exports by the domestic ...rm. On the contrary, the larger country never bene...ts from trade, since liberalization decreases the d...

Why would the US threaten punitive tariffs on luxury autos to implement a market share target in auto parts? We show that by making threats to a linked market, a market share target may be implemented with fairly weak informational and administrative requirements. Moreover, such policies can be both pro-competitive and advantageous to US firms. ( 1998 Elsevier Science B.V. All rights reserved. ...

This paper considers the phenomenon of third party antidumping; that is, the ability of a firm to bring an AD case in a foreign country against third party dumpers. Recent experience in New Zealand is discussed and suggestions are offered as to why a country might wish to permit foreigners to demand that other foreigners increase prices in that country. D 2005 Elsevier B.V. All rights reserved....