The theoretical literature on trade and growth suggests that comparative advantage is endogenous and evolves over time. However, most of the empirical analysis of international trade flows is essentially static in nature. This paper proposes an empirical model of the dynamics of international...

Since the mid-1990s, researchers have used micro datasets to study countries' production and trade at the firm level and have found that exporting firms differ substantially from firms that solely serve the domestic market. Across a wide range of countries and industries, exporting firms have...

We study whether the effects on registered manufacturing output of dismantling the License Raj—a system of central controls regulating entry and production activity in this sector—vary across Indian states with different labor market regulations. The effects are found to be unequal across...

This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region-industry factor quality differences and variation in production technology across industries. We test relative factor price equalization across...

This paper exploits the division of Germany after the Second World War and the reunification of East and West Germany in 1990 as a natural experiment to provide evidence for the importance of market access for economic development. In line with a standard new economic geography model, we find...

This paper reviews the new economic geography literature, which accounts for the uneven distribution of economic activity across space in terms of a combination of love of variety preferences, increasing returns to scale and transport costs. After outlining the canonical core and periphery...

A key feature of OECD economic growth since the early 1970s has been the secular decline in manufacturing’s share of GDP and the secular rise of service sectors. This Paper examines the role played by relative prices, technology, factor endowments and labour market institutions in the process...

This Paper analyses patterns of production across 14 industries in 45 regions from seven European countries since 1975. We estimate a structural equation derived directly from neoclassical trade theory that relates an industry’s share of a region’s GDP to factor endowments, relative prices...

This paper estimates a structural model of economic geography using cross-country data on per capita income, bilateral trade, and the relative price of manufacturing goods. More than 70% of the variation in per capita income can be explained by the geography of access to markets and to sources...