Domestic Institutions as a Source of Comparative Advantage*
Nathan Nunna, b and Daniel Treflerb, c, aHarvard University, Cambridge, MA, USA, bNational Bureau of Economic Research, Cambridge, MA, USA, cUniversity of Toronto, Toronto, ON, Canada
Domestic institutions can have profound effects on international trade. This chapter reviews the theoretical and empirical underpinnings of this insight. Particular attention is paid to contracting institutions and to comparative advantage, where the bulk of the research has been concentrated. We also consider the reverse causation running from comparative advantage to domestic institutions.
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