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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. 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).
  2. 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.
  3. De Benedictis, L. & Nenci, S. & Santoni, G. & Tajoli, L. & Vicarelli, C., 2013. "Network Analysis of World Trade using the BACI-CEPII dataset," Working papers 471, Banque de France.
  4. Luis Castro & Ben Li & Keith E. Maskus & Yiqing Xie, 2014. "Fixed Export Costs and Export Behavior," CESifo Working Paper Series 4697, CESifo Group Munich.
  5. Cristea, Anca D., 2011. "Buyer-seller relationships in international trade: Evidence from U.S. States' exports and business-class travel," Journal of International Economics, Elsevier, vol. 84(2), pages 207-220, July.
  6. Lincoln, William F. & McCallum, Andrew H., 2011. "Entry Costs and Increasing Trade," Working Papers 619, Research Seminar in International Economics, University of Michigan.
  7. di Giovanni, Julian & Levchenko, Andrei A. & Rancière, Romain, 2010. "Power Laws in Firm Size and Openness to Trade: Measurement and Implications," CEPR Discussion Papers 7773, C.E.P.R. Discussion Papers.
  8. Sergey Mityakov & Heiwai Tang & Kevin K. Tsui, 2012. "InternationalPolitics and Import Diversification in the Second Wave of Globalization," Discussion Papers Series, Department of Economics, Tufts University 0770, Department of Economics, Tufts University.
  9. 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.

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