We use unique plant-level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad. To guide our empirical analysis we develop a monopolistic-competition model of the materials sourcing decisions of heterogeneous...

In the last decades, the world economy has been undergoing a process of production reorganisation and relocation of unprecedented scale and scope. The era of ?globalisation? has been characterised by falling barriers to trade and increasing capital flows, both of speculative and investment...

The empirical U-shaped pattern between product diversification and economic development has been widely examined, but here we analyze the determinants of diversification. We find that a high level of rent-seeking activities has a large impact on the diversification of nations: in countries where...