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Network effects on international trade

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  • Lee, Jaehwa
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    Abstract

    Empirical findings from the gravity model using a bilateral data set of 23 OECD countries provide strong support for the network effect of FDI, migration, and the Internet on international trade. Further, the findings show differences in the network effect between the manufacturing and service sectors. The Internet is the most important channel for the network effect for both the manufacturing and service sectors, whereas migration is important only for the manufacturing sector.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0165176512000572
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    Bibliographic Info

    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 116 (2012)
    Issue (Month): 2 ()
    Pages: 199-201

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    Handle: RePEc:eee:ecolet:v:116:y:2012:i:2:p:199-201

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    Web page: http://www.elsevier.com/locate/ecolet

    Related research

    Keywords: Network; Migration; FDI; Internet; Trade;

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    References

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    1. Theresa M. Greaney, 2004. "Measuring network effects on trade: are Japanese affiliates distinctive?," Hi-Stat Discussion Paper Series d04-57, Institute of Economic Research, Hitotsubashi University.
    2. Caroline Freund & Diana Weinhold, 2002. "The Internet and International Trade in Services," American Economic Review, American Economic Association, vol. 92(2), pages 236-240, May.
    3. Greaney, Theresa M., 2009. "Measuring network effects on trade: A reexamination," Japan and the World Economy, Elsevier, vol. 21(3), pages 219-225, August.
    4. James E. Rauch & Vitor Trindade, 1999. "Ethnic Chinese Networks in International Trade," NBER Working Papers 7189, National Bureau of Economic Research, Inc.
    5. Marion Jansen & Roberta Piermartini, 2009. "Temporary Migration and Bilateral Trade Flows," The World Economy, Wiley Blackwell, vol. 32(5), pages 735-753, 05.
    6. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
    7. Albuquerque, Rui & Loayza, Norman & Serven, Luis, 2003. "World market integration through the lens of foreign direct investors," Policy Research Working Paper Series 3060, The World Bank.
    8. Freund, Caroline L. & Weinhold, Diana, 2004. "The effect of the Internet on international trade," Journal of International Economics, Elsevier, vol. 62(1), pages 171-189, January.
    9. Deborah L. Swenson, 2004. "Foreign Investment and the Mediation of Trade Flows," Review of International Economics, Wiley Blackwell, vol. 12(4), pages 609-629, 09.
    10. Choi, Changkyu, 2010. "The effect of the Internet on service trade," Economics Letters, Elsevier, vol. 109(2), pages 102-104, November.
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