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Two-sided heterogeneity and trade

Author

Listed:
  • Bernard, Andrew B.
  • Moxnes, Andreas
  • Ulltveit-Moe, Karen Helene

Abstract

This paper develops a multi-country model of international trade that provides a simple microfoundation for buyer-seller relationships in trade. We explore a rich dataset that identifies buyers and sellers in trade and establish a set of basic facts that guide the development of the theoretical model. We use predictions of the model to examine the role of buyer heterogeneity in a market for firm-level adjustments to trade shocks, as well as to quantitatively evaluate how firms’ marginal costs depend on access to suppliers in foreign markets.

Suggested Citation

  • Bernard, Andrew B. & Moxnes, Andreas & Ulltveit-Moe, Karen Helene, 2016. "Two-sided heterogeneity and trade," LSE Research Online Documents on Economics 66444, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:66444
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    File URL: http://eprints.lse.ac.uk/66444/
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Heterogeneous firms; exporters; importers; sourcing costs; trade elasticity;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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    This paper has been announced in the following NEP Reports:

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