Co-ethnic networks foster trade by providing information about trading opportunities and taking advantage of mutual trust. While the economics literature usually focuses on direct ethnic links between source and host countries, sociological studies adopt a broader perspective. They emphasize the...

We sort out confounding factors in the empirical link between bilateral migration and trade. Using newly available panel data on developing countries' diaspora to rich OECD nations in a theory-grounded gravity model, we uncover a robust, causal pro-trade effect. Moreover, we do not find evidence...

Recent quantitative trade models treat import tariffs as pure cost shifters so that their effects are similar to iceberg trade costs. We introduce revenue-generating import tariffs, which act as demand shifters, into the framework of Arkolakis, Costinot and Rodriguez-Clare (2012), and generalize...

No consensus has been reached so far on what a business model is. In particular, no comprehensive explanation exists of the decisions to be taken in developing business models in times of long-term, far-reaching technological change. In this article, we therefore start by giving a broad...

Influential empirical work by Rauch and Trindade (REStat, 2002) finds that Chinese ethnic networks of the magnitude observed in Southeast Asia increase bilateral trade by at least 60%. We argue that this estimate is upward biased due to omitted variable bias. Moreover, it is partly related to a...

Trade economists traditionally study the effect of lower variable trade costs. While increasingly important politically, technical barriers to trade (TBTs) have received less attention. Viewing TBTs as fixed regulatory costs related to the entry into export markets, we use a model with...

Empirical papers show that successful exporting firms either use unaffiliated foreign trade intermediaries or own foreign wholesale subsidiaries. However, conventional trade theory models assume that producers can directly access foreign consumers. We introduce intermediaries in an international...

In the two-country Melitz (2003) model, unilateral trade liberalization is often cast as a reduction of iceberg transportation costs and wages are determined by a linear outside sector, We show that welfare results reverse when wages adjust and trade frictions are revenue-generating tariffs.