We use a unique dataset to analyze marriage and union patterns of European nobility from the 1500s to the 1800s. Our matching model predicts homophily in title, and that more stringent constraints on the dowries lead to a higher degree of homophily. Historical evidence supports both predictions: nobles tended to marry nobles with identical title; and, German marriages, whose dowry rules were more rigid, were characterized by a higher degree of homophiliy in titles than English marriages. Moreover, homophily in titles decreased over time for Germans, and remained constant for English nobles.

We explore welfare properties in a firm heterogeneity model with multinational production and export. The presence of multinational production plays a crucial role in delivering a partial trade elasticity of total sales by exporters and affiliates that is no longer constant, and depends on both supply and demand parameters. We then analyse counterfactual scenarios. Multinational production with intra‐firm trade increases welfare gains by up to 4% with respect to a model with only export and no truncation. Multinational production à la Helpman et al. (American Economic Review, 2004, 94, 300) generates the largest welfare gains from liberalisation.