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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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    References listed on IDEAS

    as
    1. Roc Armenter & Mikl?s Koren, 2014. "A Balls-and-Bins Model of Trade," American Economic Review, American Economic Association, vol. 104(7), pages 2127-2151, July.
    2. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
    3. Marcela Eslava & James Tybout & David Jinkins & C. Krizan & Jonathan Eaton, 2015. "A Search and Learning Model of Export Dynamics," 2015 Meeting Papers 1535, Society for Economic Dynamics.
    4. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    5. Davide Castellani & Francesco Serti & Chiara Tomasi, 2010. "Firms in International Trade: Importers' and Exporters' Heterogeneity in Italian Manufacturing Industry," The World Economy, Wiley Blackwell, vol. 33(3), pages 424-457, March.
    6. Matthew O. Jackson & Brian W. Rogers, 2007. "Meeting Strangers and Friends of Friends: How Random Are Social Networks?," American Economic Review, American Economic Association, vol. 97(3), pages 890-915, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Heterogeneous firms; exporters; importers; sourcing costs; trade elasticity;

    JEL classification:

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

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