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The Role of NAFTA and Returns to Scale in Export Duration

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  • Tibor Besedeš

Abstract

While exports within NAFTA face a lower hazard of ceasing, its onset has increased the hazard for Mexican and US intra NAFTA exports. Intra NAFTA exports still enjoy a lower hazard relative to exports to non-members. While NAFTA did affect the hazard for Canada's exports in the short run, its effect on Mexican and US exports is persistent. Exports of increasing-returns-to-scale (IRS) manufacturing products face the highest hazard in the case of Canada and Mexico, while IRS natural resource products have the highest hazard for Mexico. The effect of NAFTA on the returns to scale product types is exporter specific. (JEL codes: F10, F14) Copyright The Author 2012. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please email: journals.permissions@oup.com, Oxford University Press.

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Bibliographic Info

Article provided by CESifo in its journal CESifo Economic Studies.

Volume (Year): 59 (2013)
Issue (Month): 2 (June)
Pages: 306-336

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Handle: RePEc:oup:cesifo:v:59:y:2013:i:2:p:306-336

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References

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  1. Werner Antweiler & Daniel Trefler, 2000. "Increasing Returns and All That: A View From Trade," NBER Working Papers 7941, National Bureau of Economic Research, Inc.
  2. Leonardo Iacovone & L.A. Winters, 2010. "Trade as an engine of creative destruction: Mexican experience with Chinese competition," LSE Research Online Documents on Economics 48914, London School of Economics and Political Science, LSE Library.
  3. Timothy J. Kehoe & Kim J. Ruhl, 2009. "How important is the new goods margin in international trade?," Staff Report 324, Federal Reserve Bank of Minneapolis.
  4. James E. Rauch & Joel Watson, 1999. "Starting Small in an Unfamiliar Environment," Cowles Foundation Discussion Papers 1218, Cowles Foundation for Research in Economics, Yale University.
  5. Besedes, Tibor, 2010. "Export Differentiation in Transition Economies," MPRA Paper 26362, University Library of Munich, Germany.
  6. Volker Nitsch, 2007. "Die Another Day: Duration in German Import Trade," CESifo Working Paper Series 2085, CESifo Group Munich.
  7. Mélise Jaud & Madina Kukenova & Martin Strieborny, 2009. "Financial dependence and intensive margin of trade," PSE Working Papers halshs-00575005, HAL.
  8. Besedes, Tibor & Prusa, Thomas J., 2006. "Product differentiation and duration of US import trade," Journal of International Economics, Elsevier, vol. 70(2), pages 339-358, December.
  9. repec:hal:wpaper:halshs-00575005 is not listed on IDEAS
  10. Debaere, Peter & Mostashari, Shalah, 2010. "Do tariffs matter for the extensive margin of international trade? An empirical analysis," Journal of International Economics, Elsevier, vol. 81(2), pages 163-169, July.
  11. Hess, Wolfgang & Persson, Maria, 2010. "Exploring the Duration of EU Imports," Working Paper Series 849, Research Institute of Industrial Economics.
  12. Hess, Wolfgang & Persson, Maria, 2010. "The Duration of Trade Revisited. Continuous-Time vs. Discrete-Time Hazards," Working Papers 2010:1, Lund University, Department of Economics.
  13. Cadot, Olivier & Iacovone, Leonardo & Pierola, Denisse & Rauch, Ferdinand, 2011. "Success and failure of African exporters," Policy Research Working Paper Series 5657, The World Bank.
  14. Besedes, Tibor & Prusa, Thomas J., 2011. "The role of extensive and intensive margins and export growth," Journal of Development Economics, Elsevier, vol. 96(2), pages 371-379, November.
  15. John Romalis, 2005. "NAFTA's and CUSFTA's Impact on International Trade," NBER Working Papers 11059, National Bureau of Economic Research, Inc.
  16. Brenton, Paul & Saborowski, Christian & von Uexkull, Erik, 2009. "What explains the low survival rate of developing country export flows ?," Policy Research Working Paper Series 4951, The World Bank.
  17. Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
  18. Wolfgang Hess & Maria Persson, 2012. "The duration of trade revisited," Empirical Economics, Springer, vol. 43(3), pages 1083-1107, December.
  19. repec:pse:psecon:2009-35 is not listed on IDEAS
  20. Tibor Besedes, . "A Search Cost Perspective on Duration of Trade," Departmental Working Papers 2006-12, Department of Economics, Louisiana State University.
  21. Tibor Besedeš, 2008. "A Search Cost Perspective on Formation and Duration of Trade," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 835-849, November.
  22. Tibor Besedes & Thomas J. Prusa, 2003. "On the Duration of Trade," NBER Working Papers 9936, National Bureau of Economic Research, Inc.
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Cited by:
  1. De Hoyos, Rafael E. & Iacovone, Leonardo, 2011. "Economic performance under NAFTA : a firm-level analysis of the trade-productivity linkages," Policy Research Working Paper Series 5661, The World Bank.
  2. Rudi, Jeta & Grant, Jason H. & Peterson, Everett B., 2012. "Survival of the Fittest: Explaining Export Duration and Export Failure in the U.S. Fresh Fruit and Vegetable Market," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124706, Agricultural and Applied Economics Association.

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