Using a novel Hungarian dataset on firms and their Chief Executive Officers (CEOs), we estimate the impact of hiring expatriate CEOs. By examining foreign acquisitions where the new owner replaces the incumbent CEO with an expatriate or a local CEO, we address the selection into both acquisition...

The paper provides a general-equilibrium model where incomplete international financial markets lead to insufficient industrial specialization and low international trade. As international portfolio diversification is limited and productivity is uncertain, investors wish to maintain a...

Exporters are few---less than one fifth among U.S. manufacturing firms---and are larger than non-exporting firms---about 4-5 times more total sales per firm. These facts are often cited as support for models with economies of scale and firm heterogeneity as in Melitz (2003). We find that the...

We estimate a model of importers in Hungarian micro data and conduct counterfactual policy analysis to investigate the effect of imports on productivity. We find that importing all foreign varieties would increase firm productivity by 12 percent, almost two-fifths of which is due to imperfect...

We propose a simple spatial model to explain why the price level is higher in rich countries. There are two sectors: manufacturing, which is freely tradable, and non-tradable services, which have to locate near customers in big cities. As countries develop, total factor productivity increases...

A number of stylized facts have been documented about the extensive margin of trade---which firms export, and how many products they send to how many destinations. We argue that the sparse nature of trade data is crucial to understanding these stylized facts. Typically the number of...

We use Hungarian Customs data on product-level imports of manufacturing firms to document that the import price of a particular product varies substantially across buying firms. We relate the level of import prices to firm characteristics such as size, foreign ownership, and market power. We...

The paper provides an explanation to the policy of implicit exchange rate bands. Especially when introducing a new exchange rate band or modifying the old one, central banks often intervene intra-marginally, targeting a narrower band than that announced. The theoretical literature provides...

A number of stylized facts have been documented about the extensive margin of trade - which firms export, and how many products they send to how many destinations. We argue that the sparse nature of trade data is crucial to understanding these stylized facts. Typically the number of observations...

What is the effect of imports on productivity? To answer this question, we estimate a structural model of producers using product-level import data for a panel of Hungarian manufacturing firms from 1992 to 2001. In our model with heterogenous firms, producers choose to import or purchase...