Recent empirical evidence suggests that prices for some goods and services are higher in larger markets. This paper provides a demand-side explanation for this phenomenon when firms can choose how much to differentiate their products in a model of monopolistic competition with horizontal product...

This paper shows that the R&D intensity of an industry plays an important role in determining international trade patterns via its effect on scale economies. I first develop a model of trade with heterogeneous firms where firms compete with each other by spending on fixed product development...

The theory of the firm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms' integration opportunities affect the way contract enforcement institutions determine international trade...

This paper shows that the R&D intensity of an industry plays an important role in determining international trade patterns via its effect on scale economies. I first develop a model of trade with heterogeneous firms where firms compete with each other by spending on fixed product development...

Recent empirical evidence suggests that prices for some goods and services are higher in larger markets. This paper provides a demand-side explanation for this phenomenon when firms can choose how much to differentiate their products in a model of monopolistic competition with horizontal product...

The theory of the firm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms' integration opportunities affect the way institutions determine international trade patterns. We find...