We build a model of tacit collusion between firms that operate in multiple markets to study the effects of trade costs. A key feature of the model is that cartel discipline is endogenous. Thus, markets that appear segmented are strategically linked via the incentive compatibility constraint....

This study estimates the effect of trade facilitation measures implementation on trade costs in Asia and the Pacific using data from the United Nations Global Survey on Trade Facilitation and Paperless Trade Implementation. Impact of different sets of measures are considered, from a basic set of...

By combining datasets from various resources, this paper establishes an ad valorem freight cost measure for China's exports from 2000 to 2006. We find that on average, the freight cost is about 10% of the FOB value per shipment. Comparing the freight cost with the tariff cost, the average...

What are the barriers that separate nations; While recent work provides intriguing clues, we have remarkably little concrete evidence as to the nature, size, and shape of barriers. This paper offers direct and indirect evidence on trade barriers, moving us toward a comprehensive geography of...

We present a general equilibrium model of the response of firms' decisions to operate, innovate, and engage in international trade to a change in the marginal cost of international trade. We find that, although a change in trade costs can have a substantial impact on heterogeneous firms' exit,...

Fixed transaction costs and delivery lags are important costs of international trade. These costs lead firms to import infrequently and hold substantially larger inventories of imported goods than domestic goods. Using multiple sources of data, we document these facts. We then show that a...

We derive a simple equation to calculate the global welfare impact of the simultaneous reduction of trade costs between multiple country-pairs. Interestingly, we find that we obtain the same equation for a broad class of trade models. Moreover, balanced trade is mostly not required for the...

Recent evidences show the co-existence of lower trade cost and higher amount of foreign direct investment (FDI), which cannot be explained by the traditional "proximity-concentration trade-off". We show that if both the home and the host country markets are important to the foreign firm, lower...

Recent literature has highlighted the major contribution of multi-product firms to international trade activity. Such firms ship several product categories to foreign destinations each time they export. Our objective is to document the contribution of product selection to the reaction of firms...

Do high levels of human capital foster economic growth by facilitating technology adoption? If so, countries with more human capital should have adopted more rapidly the skilled-labor augmenting technologies becoming available since the 1970’s. High human capital levels should therefore have...