HARRY P. BOWEN is Professor of Economics at Vlerick-Leuren-Gent Management School. He is a Research Economist of the National Bureau of Economic Research and has written extensively on international trade in many journals, including the American Economic Review, the Quarterly Journal of Economics and the Review of Economics and Statistics. ABRAHAM HOLLANDER is Associate Professor of Economics at the Department of Economics, University of Montreal, and Associate Researcher at the Centre de Recherche et Developpement en Economique (CRDE). He has written extensively in journals like the European Economic Review, the International Journal of Industrial Organization and the Journal of International Economics. JEAN-MARIE VIAENE is Professor of Economics in the Department of Economics at Erasmus University, Rotterdam. He is a Research Fellow at the Tinbergen Institute and has publications on international economics in many journals, including Economic Letters, the European Economic Review and the Journal of International Economics.