IDEAS home Printed from https://ideas.repec.org/a/bla/ausecr/v43y2010i3p270-288.html
   My bibliography  Save this article

Structural Estimation of Variety Gains from Trade Integration in Asia

Author

Listed:
  • d'Artis Kancs

Abstract

"This article studies the variety gains of trade integration in Asia. Adopting a heterogeneous firm model of trade of monopolistic competition allowed us to estimate not only the welfare gains because of country specialisation, but also the variety gains arising from trade integration. The underlying structural parameters were estimated econometrically, based on a large panel of firm-level data for the Asian economies (ORIANA). Our empirical findings suggest that, when relaxing the assumption of firm homogeneity and accounting for export market entry costs, the gains from trade integration are higher than in conventional models with representative firms." Copyright (c)2010 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research.

Suggested Citation

  • d'Artis Kancs, 2010. "Structural Estimation of Variety Gains from Trade Integration in Asia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(3), pages 270-288.
  • Handle: RePEc:bla:ausecr:v:43:y:2010:i:3:p:270-288
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-8462.2010.00606.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Samuel S. Kortum, 1997. "Research, Patenting, and Technological Change," Econometrica, Econometric Society, vol. 65(6), pages 1389-1420, November.
    2. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    3. Kancs, d'Artis, 2007. "Trade Growth in a Heterogeneous Firm Model: Evidence from South Easten Europe," Working Papers of Institute for Economic Forecasting 071201, Institute for Economic Forecasting.
    4. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2003. "Plants and Productivity in International Trade," American Economic Review, American Economic Association, vol. 93(4), pages 1268-1290, September.
    5. Feenstra, Robert C. & Gopinath, Munisamy, 2010. "Chapter 7: The Gains From International Trade Under Monopolistic Competition," Proceedings Issues, 2010: Trade in Agriculture: Much Done, So Much More to Do, December 2010, Berkeley, California 184023, International Agricultural Trade Research Consortium.
    6. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    7. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    8. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
    9. Christian Broda & David E. Weinstein, 2006. "Globalization and the Gains From Variety," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 541-585.
    10. Timothy J. Kehoe & Kim J. Ruhl, 2013. "How Important Is the New Goods Margin in International Trade?," Journal of Political Economy, University of Chicago Press, vol. 121(2), pages 358-392.
    11. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    12. Roland-Holst, David & Verbiest, Jean-Pierre & Zhai, Fan, 2005. "Growth and Trade Horizons for Asia: Long-term Forecasts for Regional Integration," Asian Development Review, Asian Development Bank, vol. 22(2), pages 76-107.
    13. Robert C. Feenstra, 2010. "Measuring the gains from trade under monopolistic competition," Canadian Journal of Economics, Canadian Economics Association, vol. 43(1), pages 1-28, February.
    14. Zhai, Fan, 2008. "Armington Meets Melitz: Introducing Firm Heterogeneity in a Global CGE Model of Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 575-604.
    15. d'Artis Kancs & Jan Van Hove, 2010. "Variety gains of trade integration in a heterogeneous firm model," EERI Research Paper Series EERI_RP_2010_34, Economics and Econometrics Research Institute (EERI), Brussels.
    16. Victor Rivas, 2012. "Structural Estimation of Variety Gains from Trade Integration in a Heterogeneous Firms Framework," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 55(2), pages 78-93.
    17. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity," Review of Economic Studies, Oxford University Press, vol. 75(1), pages 295-316.
    18. Ballard, Charles L. & Cheong, Inkyo, 1997. "The effects of economic integration in the Pacific Rim: A computational general equilibrium analysis," Journal of Asian Economics, Elsevier, vol. 8(4), pages 505-524.
    19. d'Artis Kancs, 2010. "Structural Estimation of Variety Gains from Trade Integration in Asia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(3), pages 270-288.
    20. Bruce A. Blonigen & Anson Soderbery, 2009. "Measuring the Benefits of Product Variety with an Accurate Variety Set," NBER Working Papers 14956, National Bureau of Economic Research, Inc.
    21. Robert C. Feenstra & Hiau Looi Kee, 2007. "Trade Liberalisation and Export Variety: A Comparison of Mexico and China," The World Economy, Wiley Blackwell, vol. 30(1), pages 5-21, January.
    22. Costas Arkolakis & Svetlana Demidova & Peter J. Klenow & Andres Rodriguez-Clare, 2008. "Endogenous Variety and the Gains from Trade," American Economic Review, American Economic Association, vol. 98(2), pages 444-450, May.
    23. Jesus Felipe, 1999. "Total factor productivity growth in East Asia: A critical survey," Journal of Development Studies, Taylor & Francis Journals, vol. 35(4), pages 1-41.
    24. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Global impacts of Doha trade reform scenarios on poverty," Policy Research Working Paper Series 3735, The World Bank.
    25. Jayatilleke S. Bandara & Wusheng Yu, 2003. "How Desirable is the South Asian Free Trade Area? A Quantitative Economic Assessment," The World Economy, Wiley Blackwell, vol. 26(9), pages 1293-1323, September.
    26. d'Artis Kancs, 2007. "Trade Growth in a Heterogeneous Firm Model: Evidence from South Eastern Europe," The World Economy, Wiley Blackwell, vol. 30(7), pages 1139-1169, July.
    27. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    28. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-177, March.
    29. Ardelean, Adina & Lugovskyy, Volodymyr, 2010. "Domestic productivity and variety gains from trade," Journal of International Economics, Elsevier, vol. 80(2), pages 280-291, March.
    30. Cherkashin, Ivan & Demidova, Svetlana & Kee, Hiau Looi & Krishna, Kala, 2015. "Firm heterogeneity and costly trade: A new estimation strategy and policy experiments," Journal of International Economics, Elsevier, vol. 96(1), pages 18-36.
    31. Roland-Holst, David & Tarp, Finn & Huong, Pham Lan & Thanh, Vo Tri, 2003. "Dragon by the Tail, Dragon by the Head, Bilateralism and Globalism in East Asia," MPRA Paper 29423, University Library of Munich, Germany.
    32. I-Hui Cheng & Howard J. Wall, 2005. "Controlling for heterogeneity in gravity models of trade and integration," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 49-63.
    33. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 441-487.
    34. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    35. Gallaway, Michael P. & McDaniel, Christine A. & Rivera, Sandra A., 2003. "Short-run and long-run industry-level estimates of U.S. Armington elasticities," The North American Journal of Economics and Finance, Elsevier, vol. 14(1), pages 49-68, March.
    36. George C. Davis & Nancy C. Kruse, 1993. "Consistent Estimation of Armington Demand Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 719-723.
    37. Xavier Gabaix, 1999. "Zipf's Law for Cities: An Explanation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 739-767.
    38. Hillberry, Russell H. & McDaniel, Christine A., 2002. "A Decomposition of North American Trade Growth since NAFTA," Working Papers 15866, United States International Trade Commission, Office of Economics.
    39. David Hummels & Peter J. Klenow, 2005. "The Variety and Quality of a Nation's Exports," American Economic Review, American Economic Association, vol. 95(3), pages 704-723, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:spr:rvmgts:v:11:y:2017:i:3:d:10.1007_s11846-016-0201-4 is not listed on IDEAS
    2. James Anderson, 2001. "Migration, FDI, and the Margins of Trade," EERI Research Paper Series EERI_RP_2001_05, Economics and Econometrics Research Institute (EERI), Brussels.
    3. Victor Rivas, 2012. "Structural Estimation of Variety Gains from Trade Integration in a Heterogeneous Firms Framework," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 55(2), pages 78-93.
    4. d'Artis Kancs, 2010. "Structural Estimation of Variety Gains from Trade Integration in Asia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(3), pages 270-288.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ausecr:v:43:y:2010:i:3:p:270-288. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/mimelau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.