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The agglomeration of exporters by destination

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  • Andrew Cassey

    ()

  • Katherine Schmeiser

    ()

Abstract

Precise characterization of informational trade barriers is neither well documented nor understood. Using Russian customs data, we document that regional destination-specific export spillovers exist for developing countries, extending a result that was only known for developed countries. This result suggests behavior responding to a destination barrier. To account for this fact, we build on a monopolistic competition model of trade by postulating an externality in the international transaction of goods. We test the model’s prediction on region-level exports using Russian data and find improvement over gravity-type models without agglomeration. This finding has important development implications in that export policy that considers current trade partners may be more effective than policy that focuses only on the exporting country’s industries. Furthermore, our findings can be considered in the burgeoning literature refining transaction costs beyond the traditional iceberg cost. Copyright Springer-Verlag 2013

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Bibliographic Info

Article provided by Springer in its journal The Annals of Regional Science.

Volume (Year): 51 (2013)
Issue (Month): 2 (October)
Pages: 495-513

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Handle: RePEc:spr:anresc:v:51:y:2013:i:2:p:495-513

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Keywords: D23; F12; L29;

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References

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  1. Fujita, Masahisa & Thisse, Jacques-François, 1996. "Economics of Agglomeration," CEPR Discussion Papers 1344, C.E.P.R. Discussion Papers.
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  18. Koenig, Pamina, 2009. "Agglomeration and the export decisions of French firms," Journal of Urban Economics, Elsevier, vol. 66(3), pages 186-195, November.
  19. A. Cassey & K. Schmeiser, 2013. "Six comparisons of firm-level and product-level data," Applied Economics Letters, Taylor & Francis Journals, vol. 20(4), pages 382-385, March.
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Citations

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Cited by:
  1. Nakhoda, Aadil, 2013. "The impact of the exports of BRIC countries plus Turkey on the exports of Pakistan," MPRA Paper 52477, University Library of Munich, Germany.
  2. Sun, Churen & Yu, Zhihao & Zhang, Tao, 2012. "Agglomeration and Trade with Heterogeneous Firms," MPRA Paper 49001, University Library of Munich, Germany, revised 17 Aug 2013.
  3. Andrew J Cassey & Katherine N Schmeiser, 2013. "The agglomeration by destination of U.S. state exports," Economics Bulletin, AccessEcon, vol. 33(2), pages 1504-1510.
  4. Churen Sun & Zhihao Yu & Tao Zhang, 2012. "Agglomeration, Productivity, and Firms¡® Exports: Evidence from Chinese Firm-level Data," ERSA conference papers ersa12p882, European Regional Science Association.

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