Recent trade theory in the Krugman (1980) tradition predicts that countries with larger market size enjoy higher levels of total factor productivity (TFP) - and equivalently of real per capita income or welfare - as a smaller fraction of spending on inputs is affected by trade costs. However, in...

World trade evolves at two margins. Where a bilateral trading relationship already exists it may increase through time (intensive margin). But trade may also increase if a trading bilateral relationship is newly established between countries that have not traded with each other in the past...

Reportedly, firms often find it impossible to finance large and long-term projects despite positive net present values. Should governments step in and can their assistance be effective? This paper studies the case of public export credit guarantees in Germany. Covering the default risk of...