We show theoretically and confirm empirically that domestic productivity has a significant impact on the demand for foreign varieties under the assumption that domestic and foreign varieties are imperfect substitutes. In particular, the demand for imported varieties is more elastic for countries...

Purchasing goods from distant locations introduces a significant lag between when a product is shipped and when it arrives. These transit lags are trade barriers for firms facing volatile demand, who must place orders before knowing the resolution of demand uncertainty. We provide a model in...

We examine a generalized version of Flam and Helpman [Flam, H., Helpman, E., 1987. Vertical Product Differentiation and North-South Trade. American Economic Review, 77, 810-822.] in which consumption prices for quality differentiated goods are rising in household income. We provide propositions...

We examine a generalized version of Flam and Helpman [Flam, H., Helpman, E., 1987. Vertical Product Differentiation and North-South Trade. American Economic Review, 77, 810-822.] in which consumption prices for quality differentiated goods are rising in household income. We provide propositions...