The paper explores theoretically and empirically why trade intermediaries (TIs) are frequently used as agents for exports to some countries but not to others. We adapt a standard intra-industry trade model with variable export costs (e.g. transport) and fixed export costs (e.g. market access) to...

Environmental policies frequently target the ratio of dirty to green output within the same industry. To achieve such targets the green sector may be subsidised or the dirty sector be taxed. This paper shows that in a monopolistic competition setting the two policy instruments have different...

This paper discusses the eastward enlargement process of the EU in the framework of a simple war of attrition bargaining game. Both players – the existing EU members and the applicants – benefit from enlargement, yet for the applicants reform to the acquis is costly, while the EU prefers...

Recently the software industry has experienced fundamental changes in market structure through the entry of open source competitors, e.g. Linux‘s entry into the operating systems market. In a simple model we examine the effects of such a change in market structure from monopoly to duopoly...

Soft budget constraints (SBCs) are a persistent feature of transition economies and have been blamed for i.a. a lack of fiscal consolidation and sluggish growth. EU eastward enlargement has - among other things - been conditioned on tackling SBCs. This paper analyzes such outside conditionality...

This note explores the relationship between the price elasticity of demand and the R&D intensity of the product. We introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugman-type setting. R&D activity is treated as a fixed cost of production. Within this framework, sectors...

This paper investigates the effect of economic integration on the ability of firms to maintain a collusive understanding about staying out of each other?s markets. The paper distinguishes among different types of trade costs: ad valorem, unit, fixed. It is shown that for a sufficient reduction...

WTO negotiations deal predominantly with bound - besides applied - tariff rates. But, how can reductions in tariffs ceilings, i.e. tariff rates that no exporter may ever actually be confronted with, generate market access? The answer to this question relates to the effects of tariff bindings on...

Zwei verwirrende Fakten der internationalen Wanderung sind, dass nur ein kleiner Teil der Bevölkerung der Auswanderungsländer emigriert und dass die Migrationsquoten mit der Zeit kleiner werden. Der Beitrag untersucht dieses Phänomen unter Zuhilfenahme eines Migrationsmodells mit heterogenen...

This paper deploys a dynamic extension of the Melitz (2003) model to generate predictions on export market exit and firm survival in a setting where firms endogenously make exit decisions. The central driver of the model dynamics is the inclusion of exogenous economy wide technological progress....