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Evaluation of Latvia’s re-exports using firm-level trade data

Author

Listed:
  • Konstantins Benkovskis

    (Monetary Policy Department, Bank of Latvia, Riga, Latvia)

  • Santa Berzina

    (Monetary Policy Department, Bank of Latvia, Riga, Latvia)

  • Liva Zorgenfreija

    (Monetary Policy Department, Bank of Latvia, Riga, Latvia)

Abstract

We use an anonymized firm-level trade database provided by the Central Statistical Bureau of Latvia to evaluate Latvia's re-exports. By solving a linear maximization problem for each firm-product pair, we obtain estimates of re-export flows and corresponding re-export mark-ups. We find that the share of-re-export flows in the total merchandise exports and imports is significant and follows an increasing trend. The share of re-exports is especially large in such product groups as transport vehicles, plastics, mineral products, and machinery and electrical equipments. The majority of re-export flows are directed to closest neighbours - Lithuania and Estonia - suggesting that Latvia serves as a sort of a regional transport hub. We also find that average re-export mark-ups are sizeable and re-export operations may provide an important contribution to Latvia’s GDP.

Suggested Citation

  • Konstantins Benkovskis & Santa Berzina & Liva Zorgenfreija, 2016. "Evaluation of Latvia’s re-exports using firm-level trade data," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 16(1), pages 1-20.
    • Handle: RePEc:bic:journl:v:16:y:2016:i:1:p:1-20
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    File URL: http://www.tandfonline.com/doi/full/10.1080/1406099X.2016.1163891
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    References listed on IDEAS

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    1. Raymond Fisman & Peter Moustakerski & Shang-Jin Wei, 2008. "Outsourcing Tariff Evasion: A New Explanation for Entrepôt Trade," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 587-592, August.
    2. Robert C. Feenstra & Gordon H. Hanson, 2004. "Intermediaries in Entrepôt Trade: Hong Kong Re‐Exports of Chinese Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(1), pages 3-35, March.
    3. Justin Pierce & Peter Schott, 2009. "Concording U.S. Harmonized System Categories Over Time," Working Papers 09-11, Center for Economic Studies, U.S. Census Bureau.
    4. Martin Mellens & Herman Noordman & Johan Verbruggen, 2007. "Re-exports: international comparison and implications for performance indicators," CPB Document 149, CPB Netherlands Bureau for Economic Policy Analysis.
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    Citations

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    Cited by:

    1. Benkovskis, Konstantins & Wörz, Julia, 2018. "What drives the market share changes? Price versus non-price factors," Structural Change and Economic Dynamics, Elsevier, vol. 45(C), pages 9-29.
    2. Konstantins Benkovskis & Jaan Masso & Olegs Tkacevs & Priit Vahter & Naomitsu Yashiro, 2020. "Export and productivity in global value chains: comparative evidence from Latvia and Estonia," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(3), pages 557-577, August.
    3. Konstantins Benkovskis & Olegs Matvejevs, 2023. "The New Version of Latvian CGE Model," Working Papers 2023/02, Latvijas Banka.
    4. Benkovskis Konstantins & Wörz Julia, 2018. "“Made in China”: how does it affect our understanding of global market shares?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 18(2), pages 1-26, June.
    5. Andrea Elteto & Katalin Antaloczy, 2016. "Post-crisis foreign trade trends and policies on the periphery of the European Union - comparison of the Iberian, Baltic and Central European region," IWE Working Papers 224, Institute for World Economics - Centre for Economic and Regional Studies.
    6. Éltető Andrea & Antalóczy Katalin, 2017. "Export Promotion Aims and Reality: A Comparison of the Iberian, Baltic and Central European Region," TalTech Journal of European Studies, Sciendo, vol. 7(1), pages 43-63, June.
    7. Konstantins Benkovskis & Peter Jarrett & Ze'ev Krill & Olegs Tkacevs & Naomitsu Yashiro, 2022. "The Survival of Latvian Products and Firms in Export Markets," Working Papers 2022/02, Latvijas Banka.
    8. Konstantins Benkovskis, 2018. "Misallocation, productivity and fragmentation of production: the case of Latvia," Journal of Productivity Analysis, Springer, vol. 49(2), pages 187-206, June.
    9. Konstantins Benkovskis, 2015. "Misallocation of Resources in Latvia: Did Anything Change During the Crisis?," Working Papers 2015/05, Latvijas Banka.
    10. Konstantins Benkovskis & Olegs Tkacevs, 2015. "Everything you always wanted to know about Latvia's service exporters (but were afraid to ask)," Working Papers 2015/06, Latvijas Banka.
    11. Anatolijs Prohorovs, 2023. "Re-Export: Assessing the Impact of Re-Export Companies on Sectors and the Economy," JRFM, MDPI, vol. 16(2), pages 1-25, January.

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    More about this item

    Keywords

    Firm-level data; Latvia; re-exports; simplex;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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