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Journal article
Two-sided heterogeneity and trade
Andrew B. Bernard, Andreas Moxnes and Karen Helene Ulltveit-Moe
July 2018

Review of Economics and Statistics 100(3), 2018
DOI: 10.1162/rest_a_00721

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