The reaction of French firms to the decrase of foreign tariffs
AbstractWe estimate the reaction of French firms to the drop in tariffs that has occurred in the late 1990s, mainly as a consequence of the Uruguay Round Agreement. To perform this estimation, we use data from the French customs and tariff rates provided by the TRAINS data base. Like in Buono and Lalanne (2009), we take advantage of the variations in tariffs over time. It allows us to exploit the panel structure of the data, which is not possible when using distance instead of tariffs. The results and the estimated reaction of firms to changes in variable export costs are strongly affected. From a cross-section, we find that the effect of tariffs on exports channels evenly through the number of exporting firms - the extensive margin - and through the exports per firm - the intensive margin. When using the panel structure, only the intensive margin reacts to tariff reductions. To understand what underlies this result, we study the role played by incumbent exporters. The latter are responsible for 95 % of the response of French exports to tariff reductions. Finally, we find that firms respond to these lower export costs by increasing their amounts exported by product rather than by exporting new products.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institut National de la Statistique et des Etudes Economiques, DESE in its series Documents de Travail de la DESE - Working Papers of the DESE with number g2010-10.
Date of creation: 2010
Date of revision:
Tariffs; Trade margins; Uruguay Round;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Boriss Siliverstovs & Dieter Schumacher, 2009.
"Estimating gravity equations: to log or not to log?,"
Springer, vol. 36(3), pages 645-669, June.
- Boriss Siliverstovs & Dieter Schumacher, 2007. "Estimating Gravity Equations: To Log or Not to Log?," Discussion Papers of DIW Berlin 739, DIW Berlin, German Institute for Economic Research.
- Burger, M.J. & Oort, F.G. van & Linders, G.J.M., 2009.
"On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-Inflated Estimation,"
ERS-2009-003-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Martijn Burger & Frank van Oort & Gert-Jan Linders, 2009. "On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-inflated Estimation," Spatial Economic Analysis, Taylor and Francis Journals, vol. 4(2), pages 167-190.
- Matthieu Crozet & Pamina Koenig, 2010.
"Structural gravity equations with intensive and extensive margins,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 43(1), pages 41-62, February.
- Matthieu Crozet & Pamina Koenig, 2008. "Structural Gravity Equations with Intensive and Extensive Margins," Working Papers 2008-30, CEPII research center.
- Matthieu Crozet & Pamina Koenig, 2007. "Structural gravity equations with intensive and extensive margins," EconomiX Working Papers 2007-36, University of Paris West - Nanterre la Défense, EconomiX.
- Buono, Ines & Lalanne, Guy, 2012.
"The effect of the Uruguay round on the intensive and extensive margins of trade,"
Journal of International Economics,
Elsevier, vol. 86(2), pages 269-283.
- I. Buono & G. Lalanne, 2009. "The Effect of the Uruguay round on the Intensive and Extensive Margins of Trade," Documents de Travail de la DESE - Working Papers of the DESE g2009-15, Institut National de la Statistique et des Etudes Economiques, DESE.
- Ines Buono & Guy Lalanne, 2010. "The effect of the Uruguay Round on the intensive and extensive margins of trade," Temi di discussione (Economic working papers) 743, Bank of Italy, Economic Research and International Relations Area.
- Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
- Jonathan Eaton, Marcela Eslava, Maurice Kugler, and James Tybout, 2007.
"Export Dynamics in Colombia: Firm-Level Evidence,"
eg0038, Wilfrid Laurier University, Department of Economics, revised 2007.
- Jonathan Eaton & Marcela Eslava & Maurice Kugler & James Tybout, 2007. "Export Dynamics in Colombia:Firm-Level Evidence," BORRADORES DE ECONOMIA 003957, BANCO DE LA REPÚBLICA.
- Jonathan Eaton & Marcela Eslava & Maurice Kugler & James Tybout, 2007. "Export Dynamics in Colombia: Firm-Level Evidence," NBER Working Papers 13531, National Bureau of Economic Research, Inc.
- Eaton, Jonathan & Eslava, Marcela & Kugler, Maurice & Tybout, James, 2007. "Export Dynamics in Colombia: Firm-Level Evidence," Working Paper Series rwp07-050, Harvard University, John F. Kennedy School of Government.
- Jonathan Eaton, Marcela Eslava, Maurice Kugler,James Tybout, 1970. "Export Dynamics in Colombia: Firm-Level Evidence," Working Papers eg0036, Wilfrid Laurier University, Department of Economics, revised 1970.
- Santos Silva, Joao & Tenreyro, Silvana, 2005.
"The Log of Gravity,"
CEPR Discussion Papers
5311, C.E.P.R. Discussion Papers.
- Chaney, Thomas, 2008.
"Distorted Gravity: The Intensive and Extensive Margins of International Trade,"
Open Access publications from University of Toulouse 1 Capitole
http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
- Susan E. Feinberg & Michael P. Keane, 2009. "Tariff effects on MNC decisions to engage in intra-firm and arm's-length trade," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 900-929, August.
- Gianmarco Ottaviano & Thierry Mayer, .
"The happy few: the internationalisation of European firms,"
Bruegel, number 12, 11.
- Thierry Mayer & Gianmarco Ottaviano, 2008. "The Happy Few: The Internationalisation of European Firms," Intereconomics: Review of European Economic Policy, Springer, vol. 43(3), pages 135-148, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (D3E).
If references are entirely missing, you can add them using this form.