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Trade integration in manufacturing: the Chilean experience

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Author Info
Maria Bas
Yvan Ledezma

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Abstract

Using bilateral trade flow data from 1979 to 1999, we estimate trade integration between Chile and its principal trading partners during the period (European Union, United States and Latin America). Our estimates are based on a gravity specification, theoretically grounded on a monopolistic competition framework with increasing returns. Trade barriers are measured following the border effect methodology by comparing inter-national imports to intra-national ones. Our results are consistent with the agenda of trade integration followed by Chile. Moreover, trade integration turns out to be heterogeneous across industries and over the time. We also find asymmetries between export and import oriented policies as well as between partners. All these features are usually missing when one uses direct measures of trade policies.

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Paper provided by PSE (Ecole normale supérieure) in its series PSE Working Papers with number 2007-50.

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Date of creation: 2007
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Handle: RePEc:pse:psecon:2007-50

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  1. Lionel Fontagne & Thierry Mayer & Soledad Zignago, 2004. "Trade in the Triad: How Easy is the Access to Large Markets?," Working Papers 2004-04, CEPII research center. [Downloadable!]
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  2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February. [Downloadable!] (restricted)
  4. Felicitas Nowak-Lehmann D. & Dierk Herzer & Sebastian Vollmer, 2005. "The Free Trade Agreement between Chile and the EU: Its Potential Impact on Chile´s Export Industry," Ibero America Institute for Econ. Research (IAI) Discussion Papers 125, Ibero-America Institute for Economic Research. [Downloadable!]
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  5. 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. [Downloadable!] (restricted)
  6. Keith Head & Thierry Mayer, 2001. "Effet frontiere, integration economique et "Forteresse Europe"," Working Papers 2001-06, CEPII research center. [Downloadable!]
  7. Jon D. Haveman & Usha Nair-Reichert & Jerry G. Thursby, 2003. "How Effective are Trade Barriers? An Empirical Analysis of Trade Reduction, Diversion, and Compression," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 480-485, 02. [Downloadable!] (restricted)
  8. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics. [Downloadable!]
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