overall gains from openness.

We calibrate the model using data on bilateral trade and MP flows, as well as business cycle and external account variables for the US. We then assess the contribution of our mechanism in explaining the observed patterns of trade and MP across countries.

Using panel data of firms located in Europe (Amadeus), we compare returns of affiliates of US and non-US multinationals, and explore the sources of their differences. It turns out that US affiliates have 14% higher sales to assets than affiliates of non-US multinational, controlling by...

Using firm-level data on U.S. multinationals, we find that affiliates created for vertical FDI motives seem to be larger and fewer—both within the firm and across affiliates—while affiliates that appear to be created for horizontal FDI motives are smaller and more common. Next, we...

The crucial difference between Foreign Direct Investment (FDI) and other international financial flows is that the former involves technology flows across countries. In the presence of country-specific shocks, these flows not only alter the distribution of output across countries, but also...

suggesting that these flows are mainly substituting each other.

We document new facts about the behavior of U.S. multinational firms and their affiliates regarding the product space in which they operate, the nature of their input-output relationships, and intra-firm trade flows. We use confidential data on U.S. multinational firms from the Bureau of...

Models that feature ideas naturally lead to scale effects, and this results in the counterfactual implication that larger countries should be richer than smaller ones. Perhaps small countries are not poor because they beneï¬Ât from foreign ideas through trade. Quantitative trade models do...

The decline in the costs of multinational production (MP) has led some countries to specialize in innovation and others to specialize in production. To study the aggregate and distributional implications of this phenomenon, we develop a quantifiable general equilibrium model of trade and MP....