This paper analyzes the effect of product market regulation (PMR) on unemployment in a search model with heterogeneous multiple-worker firms. In our setup, PMR modifies the distribution of firm productivities, thereby affecting the equilibrium rate of unemployment. We distinguish between PMR...

Cultural proximity is an important determinant of bilateral trade volumes. However, empirical quantification and testing are difficult due to the elusiveness of the concept and lack of observability. This paper draws on bilateral score data from the Eurovision Song Contest, a very popular...

The paper sets up a two-country asymmetric trade model with heterogeneous firms, search frictions and endogenous labor market institutions. Countries are linked by trade in goods and non-cooperatively set unemployment benefits to maximize national welfare. We show that more open and smaller...

A stylized monopolistic competition model of international trade is proposed where firms differ with respect to the expected economic lifetime of their innovations. Upon entry, they receive a commonly observed signal which is updated over time. Jointly with partial irreversibility of investment,...

This article unifies two approaches for identifying the welfare and wage effects of immigration, one emphasizing the immigration surplus, the other stressing a potential welfare loss due to a terms-of-trade effect. We decompose the native welfare effect into a standard complementarity effect,...

Recent literature finds that exporters are particularly vulnerable to financial market frictions. As a consequence, exports may be lower than their efficient levels. For this reason, many countries support exporters by underwriting export credit guarantees. The empirical evidence on the effects...

International migrants contribute to bilateral trade creation if their presence reduces information costs or entails additional demand for goods from their source countries. Using new data on stocks of foreign-born individuals by skill class, we try to separately quantify those two channels. We...

Many Kyoto countries fear a loss of competitiveness due to unilateral climate policy efforts; policymakers therefore call for carbon-related border tax adjustments. With this paper we attempt to estimate the treatment effect of Kyoto commitment on bilateral export flows using regression-adjusted...