This paper explores international consumption risk sharing in an open economy macro model with firm heterogeneity and shows that entry the self-selection of more efficient firms into exporting account for better sharing. I show analytically conventional unconditional correlation between relative real exchange rate is not a good metric measuring World trade data covering than two decades indicat...

A finite number of heterogeneous firms facing demand-induced price fluctuations imperfectly compete for heterogeneous workers. Because firms must commit to wages and employment before the realization of product price, they exhibit a risk-averse behavior. It is then shown that unemployment may arise in equilibrium because of the combination of uncertainty on product price and mismatch between wo...

In this paper we aim to explain intuitively heterogeneous firms’ optimal location decisions in a simple spatial market. To do so, we present and solve a four-stage game of entry, location, pricing and consumption in a spatial price discrimination framework with arbitrarily many heterogeneous firms. We provide a unique equilibrium outcome without imposing restrictions on the distribution of marg...

T his paper investigates the heterogeneous reaction of Iranian exporters to the tariff rate changes, how export prices are influenced differently by the increase or decrease in foreign importers’ tariff rate. Using the Iranian transaction level export data and firm level data during the period 2002-2015, we find that tariff pass through for Iranian firms are incomplete and exporters ...

This paper studies the effect of corporate taxes on investment. Using firm-level data on German corporations, we investigate the 2008 tax reform that cut corporate taxes by 10 percentage points. We expect heterogeneous investment responses across firms, since firms with a foreign parent have more cross-country profit shifting opportunities than domestically owned firms. Using a matching differe...