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Trade barriers and trade flows with product heterogeneity: An application to US motion picture exports

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  • Hanson, Gordon
  • Xiang, Chong

Abstract

We extend Melitz (2003) to allow for both global and bilateral fixed export costs. If global (bilateral) export costs dominate, the average sales ratio (import sales per product variety/domestic sales per variety), decreases (increases) in variable (fixed) trade barriers, due to adjustment along the intensive (extensive) margin of trade. Using novel data on bilateral US movie exports we find that (i) variation in box-office revenues per movie is much larger than in the number of movies exported, and (ii) the average sales ratio decreases in geographic and linguistic distance. These findings suggest that global fixed export costs dominate.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 83 (2011)
Issue (Month): 1 (January)
Pages: 14-26

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Handle: RePEc:eee:inecon:v:83:y:2011:i:1:p:14-26

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Web page: http://www.elsevier.com/locate/inca/505552

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Keywords: Product heterogeneity Motion pictures Fixed export costs;

References

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Citations

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Cited by:
  1. Lincoln, William F. & McCallum, Andrew H., 2011. "Entry Costs and Increasing Trade," Working Papers, Research Seminar in International Economics, University of Michigan 619, Research Seminar in International Economics, University of Michigan.
  2. Luca De Benedictis & Silvia Nenci & Gianluca Santoni & Lucia Tajoli & Claudio Vicarelli, 2013. "Network Analysis of World Trade using the BACI-CEPII dataset," Working Papers 2013-24, CEPII research center.
  3. di Giovanni, Julian & Levchenko, Andrei A. & Rancière, Romain, 2010. "Power Laws in Firm Size and Openness to Trade: Measurement and Implications," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7773, C.E.P.R. Discussion Papers.
  4. Sergey Mityakov & Heiwai Tang & Kevin K. Tsui, 2011. "Geopolitics, Global Patterns of Oil Trade, and China¡¦s Oil Security Quest," Working Papers 322011, Hong Kong Institute for Monetary Research.
  5. Francesco DI COMITE & Jacques-François THISSE & Hylke VANDENBUSSCHE, 2011. "Verti-zontal Differentiation in Monopolistic Competition," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011046, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  6. Luis Castro & Ben Li & Keith E. Maskus & Yiqing Xie, 2014. "Fixed Export Costs and Export Behavior," CESifo Working Paper Series 4697, CESifo Group Munich.
  7. Sergey Mityakov & Heiwai Tang & Kevin K. Tsui, 2012. "International Politics and Import Diversification in the Second Wave of Globalization," Development Working Papers 342, Centro Studi Luca d\'Agliano, University of Milano, revised 13 Nov 2012.
  8. William F. Lincoln & Andrew H. McCallum, 2011. "Entry Costs & Increasing Trade," William Davidson Institute Working Papers Series wp1024, William Davidson Institute at the University of Michigan.
  9. Isaac Holloway, 2014. "Foreign entry, quality, and cultural distance: product-level evidence from US movie exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 150(2), pages 371-392, May.
  10. Cristea, Anca D., 2011. "Buyer-Seller Relationships in International Trade: Evidence from U.S. States' Exports and Business-Class Travel," MPRA Paper 30347, University Library of Munich, Germany.

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