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We construct a new, global tariff dataset and apply it to a multi-sector quantitative trade model with heterogeneous firms, including nearly all countries of the world. The impact of the Uruguay Round tariff reductions over 1990–2010 is analyzed, as well as the further cuts in Preferential tariffs and the impact of moving to complete free trade. We find that the Uruguay Round tariff cuts led to large welfare gains (2%–3% relative to 1990 for the world, higher in Emerging and Developing countries), but that Preferential tariff cuts led to only small further gains (0%–1%). Surprisingly, the hypothetical movement to free trade leads to the greatest gains (5% relative to 1990, almost 10% in Emerging and Developing countries), which implies that there is strong scope for gains from future multilateral tariff reductions, especially for Emerging and Developing economies. These gains are large relative to prior estimates in the literature and we attribute about nearly one-half of our measured gains to selection effects in our heterogeneous-firm model, which are influenced by the scale of production and by two-tier Armington aggregation. [ABSTRACT FROM AUTHOR]

Abstract: Recent research has demonstrated the importance of institutional quality at the country level for both the volume of trade and the ability to trade in differentiated goods that rely on contract enforcement. This paper takes advantage of cross-provincial variation in institutional quality in China, and export data that distinguishes between foreign and domestic exporters and processing versus ordinary trade, to show that institutional quality is a significant factor in determining Chinese provincial export patterns. Institutions matter more for processing trade and more for foreign firms, just as we would expect from a greater reliance on contracts in these cases. [Copyright &y& Elsevier]

We propose an model of vertically and horizontally-integrated business groups that allows the number and size of each group to be determined endogenously. We find that more than one configuration of groups can arise in equilibrium: several different types of business groups can occur, each of which are consistent with profit-maximization and are stable. We suggest that the strongly-integrated groups arising in the model characterize the chaebol found in South Korea, whereas the less-integrated groups describe those found in Taiwan. [Copyright &y& Elsevier]