The Review of Economics and Statistics Vol. 100 No. 3 2018
Two-Sided Heterogeneity and Trade
open access
Abstract
This paper develops a multicountry model of international trade that provides a simple microfoundation for buyer-seller relationships in trade. We explore a rich data set 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.
- DOI
- 10.1162/rest_a_00721
- Volume
- 100
- Issue
- 3
- Pages
- 424-439
- Language
- en
- Sources
- crossref openalex