This paper studies the effect of imported inputs on relative skilled labor demand. To this purpose, it uses firm-level data for 27 transition countries and propensity score matching techniques. The results show that importing inputs induces skill upgrading: according to a conservative estimate,...

In a representative sample of Italian manufacturing firms, we find a robust negative correlation between productivity (however measured) and sales to low-income destinations as a share of total exports. This fact seems at odds with the heterogeneous-firms literature, which predicts...

We study how financial frictions affect firm-level heterogeneity and trade. We build a model where productivity differences across monopolistically competitive firms are endogenous and depend on investment decisions at the entry stage. By increasing entry costs, financial frictions lower the...