Half title; Title Page; Copyright; Contents; Contributors; Introduction to the Series; Preface; 1 Heterogeneous Firms and Trade; 1 Introduction; 2 Empirical Evidence; 3 General Setup; 3.1 Preferences; 3.2 Technology; 3.3 Firm Behavior; 3.4 Firm Performance Measures and Productivity; 3.5 Firm Entry and Exit; 4 Closed Economy Equilibrium; 4.1 Sectoral Equilibrium; 4.2 General Equilibrium; 5 Open Economy with Trade Costs; 5.1 Firm Behavior; 5.2 Firm Market Entry and Exit; 5.3 Mass of Firms and Price Index; 5.4 Welfare; 5.5 Symmetric Trade and Production Costs. 5.6 Multilateral Trade Liberalization5.7 Asymmetric Trade Liberalization; 6 Quantitative Predictions; 6.1 Pareto Distribution; 6.2 Gravity; 6.3 Wages and Welfare; 6.4 Structural Estimation; 7 Factor Abundance and Heterogeneity; 8 Trade and Market Size; 9 Endogenous Firm Productivity; 9.1 Product Scope Decision and Multi-Product Firms; 9.2 Innovation; 9.2.1 A Binary Innovation Choice: Technology Adoption; 9.2.2 Innovation Intensity; 9.3 Dynamics; 10 Factor Markets; 11 Conclusion; References; 2 Multinational Firms and the Structure of International Trade; 1 Introduction; 2 Stylized Facts. 3 Benchmark Model: An Extended Krugman (1980) Model4 The Proximity-Concentration Hypothesis; 4.1 Homogeneous Firms; 4.1.1 A Symmetric Model; 4.1.2 Country Asymmetries; 4.1.3 Evidence; 4.2 Firm Heterogeneity; 4.3 Greenfield FDI versus Mergers and Acquisitions; 5 Vertical Expansion; 5.1 A Factor-Proportions Model of Vertical FDI; 5.2 Vertical FDI and Wage Inequality; 5.3 Vertical FDI and Firm Heterogeneity; 5.4 Vertical FDI: Empirical Evidence; 6 MultiCountry Models; 6.1 Locations as Substitutes; 6.2 Locations as Complements; 7 Multinational Firm Boundaries; 7.1 Transaction-Cost Approaches. 7.1.1 Licensing versus FDI: Rent Dissipation7.1.2 Outsourcing versus FDI: Hold Up Inefficiencies; 7.2 The Property-Rights Approach; 7.3 Empirical Evidence; 8 Conclusion; References; 3 Gravity Equations: Workhorse, Toolkit, and Cookbook; 1 Introduction; 1.1 Gravity Features of Trade Data; 1.2 A Brief History of Gravity in Trade; 2 Micro-Foundations for Gravity Equations; 2.1 Three Definitions of the Gravity Equation; 2.2 Assumptions Underlying Structural Gravity; 2.3 Main Variants of Gravity for Trade; 2.3.1 Demand-Side Derivations; 2.3.2 Supply-Side Derivations. 2.4 Gravity Models Beyond Trade in Goods3 Theory-Consistent Estimation; 3.1 Proxies for Multilateral Resistance Terms; 3.2 Iterative Structural Estimation; 3.3 Fixed Effects Estimation; 3.4 Ratio-Type Estimation; 3.5 Other Methods; 3.6 Monte Carlo Study of Alternative Estimators; 3.7 Identification and Estimation of Country-Specific Effects; 4 Gravity Estimates of Policy Impacts; 4.1 Meta-Analysis of Policy Dummies; 4.2 The Elasticity of Trade with Respect to Trade Costs; 4.3 Partial vs General Equilibrium Impacts on Trade; 4.4 Testing Structural Gravity; 5 Frontiers of Gravity Research.