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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. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
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  3. 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.
  4. Fujita, M. & Thisse, J.-F., . "Economics of agglomeration," CORE Discussion Papers RP -1250, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  12. Schmeiser, Katherine N., 2012. "Learning to export: Export growth and the destination decision of firms," Journal of International Economics, Elsevier, vol. 87(1), pages 89-97.
  13. Glejser, Herbert & Jacquemin, Alexis & Petit, Jean, 1980. "Exports in an Imperfect Competition Framework: An Analysis of 1,446 Exporters," The Quarterly Journal of Economics, MIT Press, vol. 94(3), pages 507-24, May.
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  16. Julie Le Gallo & Sandy Dall'erba, 2008. "Spatial and sectoral productivity convergence between European regions, 1975-2000," Papers in Regional Science, Wiley Blackwell, vol. 87(4), pages 505-525, November.
  17. Lovely, Mary E. & Rosenthal, Stuart S. & Sharma, Shalini, 2005. "Information, agglomeration, and the headquarters of U.S. exporters," Regional Science and Urban Economics, Elsevier, vol. 35(2), pages 167-191, March.
  18. Krautheim, Sebastian, 2012. "Heterogeneous firms, exporter networks and the effect of distance on international trade," Journal of International Economics, Elsevier, vol. 87(1), pages 27-35.
  19. Naude, Wim & Matthee, Marianne, 2007. "The Geographical Location of Manufacturing Exporters in South Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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Citations

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Cited by:
  1. 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.
  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. 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.

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