This paper reconsiders the Canada-US border's effect on trade. The authors first test whether the findings of McCallum (1995) and Helliwell (1996)-that the border substantially decreases trade-change when better data are used. It is found that the "border effect" may be substantially less than previously measured-up to 50% smaller-but remains surprisingly large. An explanation of the border's effect is sought. Transportation equipment offers a natural experiment, as North American trade has been completely liberalized for several decades. A higher border effect is found for these freely traded goods, which rules out standard protection as the border effect's cause.

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We examine export pricing by Indian manufacturing firms in the early 2000s using a unique data set that matches firm characteristics with product and destination-level trade data. We find that, in contrast to China and other countries, firm productivity is negatively associated with export prices, and export prices are negatively associated with distance while positively associated with remoteness. Our conjecture is that Indian innovation costs, which are higher than China's, drive down the scope for quality differentiation causing a negative association between productivity and prices. To the best of our knowledge, this is the first empirical evidence consistent with heterogenous goods and short quality ladders, a theoretical possibility noted in the study by Antoniades (2012), an outcome that arises here because of domestic Indian economic and regulatory features.

We offer and test a model linking ethnic networks to global price dispersion which predicts lower price dispersion as shared ethnic populations between countries rise, effects that may reverse at higher levels as network discipline breaks down. Using Chinese, Indian and Japanese data, we find that country pairs linked by the Chinese network have significantly lower mean price dispersion. A one standard deviation increase in the size of the Chinese coethnic network lowers price dispersion by 6-33%, an effect that reverses as the network gets large. No such evidence exists for the Indian or Japanese networks. the first to propose and test an arbitrage model that links price dispersion to Chinese, Indian and Japanese ethnic networks. 2 Our first contribution is a theoretical model that relates the size of a given ethnic network between country pairs (hereafter "coethnic network") to price dispersion. Networks create discipline among their members, through the threat of expulsion, and this reduces transactions costs and price dispersion. Initially, then, a larger coethnic network between locations lowers price dispersion between those same locations. As network size increases further, however, expulsion becomes more difficult and discipline may fall, reducing the effect of the network on price dispersion.Our second contribution is an empirical test of the model's predictions. We find evidence that the Chinese coethnic network reduces price dispersion significantly. A one standard deviation increase in the size of the Chinese coethnic network between location pairs is associated with a decrease in price dispersion of between 6% and 33%. For the Chinese network the effect reverses, and price dispersion increases, as the network becomes large. The Indian network, while of commensurate size, fails to show a negative association with price dispersion. The Japanese network is tiny by comparison and there is again no evidence that it decreases price dispersion.Finally, we offer other empirical contributions including panel estimation and an instrumental variable (IV) estimate of the effect of coethnic networks on price dispersion. Our IV estimates are consistent with, and are in fact stronger than, our standard estimates.There is a nascent literature on immigrants' influence on price levels and price dispersion to which our contribution can be usefully compared. Lach (2007), Cortes (2008) and Zachariadis (2011) all study the influence of immigration on city-level prices in (respectively) Israel, the USA, and a sample of cities in the USA and eleven other countries. 3 Grouping immigrants from different countries together, they find that a higher share of immigrants in a city's population is associated with lower goods prices and price levels in individual locations. This effect is the net outcome of a variety of supply and demand side forces at work on goods prices. Zachariadis (2012) estimates the influence of immigration on goods price dispersion across locations, measuring price dispersion as the log deviation of a locat...

Using a novel dataset we examine the pricing behavior of Indian exporters, in particular looking at the relationship between export prices and the quality of imported inputs that firms use, conditioning on firm capability (productivity). Exporting firms that directly import are different in important ways from exporters that do not import directly. Among directly importing exporters, higher quality (higher price) imports are associated with higher quality (higher price) exports. In this respect, Indian exporters behave similarly to other developing country exporters, offering suggestive evidence of the importance for export success of access to high-quality imports.