We consider a trade model combining 2x2x2 Heckscher-Ohlin structure, monopolistic competition, transport costs, and multinational corporations. demonstrate how the mix of national firms that operate in equilibrium depends on technology division world endowment between countries. Multinationals are more likely to exist similar countries both relative absolute endowments. Where multinationals the...

We show that the advent of improved logistics management, including the “just-intime” (JIT) production system, can plausibly explain much of the dramatic (i.e., roughly 95%) growth of intra-firm trade in intermediates from Canadian affiliates to their U.S. MNC parents in the 1984-1995 period. The decline in tariffs and physical transport costs over this period was far too small (about 2.5%) to ...

This paper formulates an empirical model to estimate the impact of endogenous new regional trade agreement (RTA) membership on trade structure. The likelihood of new RTA membership is influenced by economic fundamentals such as country size, factor endowments, and trade and investment costs. In a sample of country-pairs covering mainly the OECD economies we find a particularly strong effect of ...