This dissertation consists of two essays on trade and one on international finance. Chapter 2 studies how international trade lowers markups of multiple varieties produced by a discrete heterogeneous firm as a short-run equilibrium. Chapter 3 assesses a two-step estimation method recently used under the WTO Article 22.6 arbitration. Specifically, this paper focuses on the two latest arbitration cases using the Armington framework: Korea's large residential washers (LRW) (case DS464) and anti-dumping duty case involving China (case DS471). Chapter 4 considers how equity home bias is related to a country-level behavioral factor (unfamiliarity) when domestic investors have limited information about foreign equities.