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Estimating Hong Kong Re-export Markups and Reconciling Trade Statistics from China, Hong Kong and Their Major Trading Partners - A Mathematical Programming Approach

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  • Wang, Zhi
  • Gehlhar, Mark
  • Yao, Shunli

Abstract

This paper develops a mathematical programming model to simultaneously estimate reexport markups and reconcile bilateral trade statistics between China, Hong Kong, and their trading partners. The model is applied to sector level trade flows to resolve discrepant reporting in an efficient manner. Adjustments in trade flows are based upon statistical reporter’s reliability information. The program is implemented in GAMS and retains many desirable theoretical and empirical properties. Estimates are used for generating trade flows and markups for Hong Kong’s re-exports used in the forthcoming version 7 GTAP database. The model’s flexibility has potential for expanded use in other regions where re-exports and associated markup cause discrepant trade flows.

Suggested Citation

  • Wang, Zhi & Gehlhar, Mark & Yao, Shunli, 2006. "Estimating Hong Kong Re-export Markups and Reconciling Trade Statistics from China, Hong Kong and Their Major Trading Partners - A Mathematical Programming Approach," Conference papers 331486, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331486
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