International trade: theory and evidence - Munich Personal RePEc ArchiveIt seems that you're in Germany. We have a dedicated site for Germany. Traditional trade theory explains trade only by differences between countries, notably differences in their relative endowments of factors of production. It suggests an inverse relationship between the similarity of countries and the volume of trade between them. The literature on trade offers an impressive number of studies based on the HO theory. The relevance of the HO theory began to be questioned when important facts of modern international trade proved to be inconsistent with its theoretical framework.
Advanced International Trade Theory and Evidence
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E-mail address: ahoefele gmail. Use the link below to share a full-text version of this article with your friends and colleagues. Learn more. When trading across borders, firms choose between different payment contracts. As predicted, international transactions are more likely paid after delivery when financing costs in the source country are high and when contract enforcement is low.
James R. Markusen University of Colorodo, Boulder. Melvin University of Waterloo. William H. Kaempfer University of Colorado, Boulder. Keith E.