International Trade in Variety and Domestic Production
AbstractWelfare gains from increasing product variety are an important� source of the gains from international trade. Recent empirical studies have largely focused on measuring the gains from an increased variety of imports. Trade theory, however,� suggests that international trade heavily affects the variety of domestically� produced goods as well. To overcome the typical data limitations on domestic varieties, we employ the number of domestic� establishments� as a proxy of the number of domestic varieties and include information on business dynamics� to assess the importance of new and disappearing varieties.� Our results suggest that for U.S. manufacturing, losses in domestic varieties from 1992 to 2006 are substantial and outweigh the gains from increased imported varieties.
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Bibliographic InfoPaper provided by Faculty of Business and Economics - University of Basel in its series Working papers with number 2011/03.
Date of creation: 2011
Date of revision:
Variety gains; margins of trade; lambda ratio; U.S. manufacturing;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
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