Disaggregated Trade Flows and the "Missing Globalization Puzzle"
This study analyzes the stability of the distance coeffi cient values over time in the generalized gravity equation of Bergstrand (1989) using both aggregate and disaggregated trade fl ows among 22 OECD countries recorded for the sample period covering 1970 until 2000. First of all, we fi nd that the missing globalization puzzle, typically observed in empirical gravity models for aggregate trade fl ows, largely disappears when one estimates a gravity model using disaggregated trade data at the level of individual industries. Secondly, we document that accounting for multilateral price resistance alone can provide some evidence against the missing globalization puzzle. At the same time, the results obtained for a traditional specifi cation of the gravity equation emphasizing the importance of disaggregated trade fl ows in explaining the distance puzzle remain largely intact.
Volume (Year): (2008)
Issue (Month): 115 ()
|Contact details of provider:|| Postal: |
Phone: 33 01 53 68 55 00
Fax: 33 01 53 68 55 01
Web page: http://www.cepii.fr
More information through EDIRC
References listed on IDEAS
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.:
- James E. Rauch, 1996.
"Networks versus Markets in International Trade,"
NBER Working Papers
5617, National Bureau of Economic Research, Inc.
- Gabriel J. Felbermayr & Wilhelm Kohler, 2004.
"Exploring the Intensive and Extensive Margins of World Trade,"
CESifo Working Paper Series
1276, CESifo Group Munich.
- Gabriel J. Felbermayr & Wilhelm Kohler, 2006. "Exploring the Intensive and Extensive Margins of World Trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(4), pages 642-674, December.
- Felbermayr, Gabriel & Kohler, Wilhelm K., 2006. "Exploring the intensive and extensive margins of world trade," Munich Reprints in Economics 20610, University of Munich, Department of Economics.
- Brun, Jean-François & Carrère, Céline & de Melo, Jaime & Guillaumont, Patrick, 2002.
"Has Distance Died? Evidence from a Panel Gravity Model,"
CEPR Discussion Papers
3500, C.E.P.R. Discussion Papers.
- Jean-François Brun & Céline Carrère & Patrick Guillaumont & Jaime de Melo, 2005. "Has Distance Died? Evidence from a Panel Gravity Model," World Bank Economic Review, World Bank Group, vol. 19(1), pages 99-120.
- Jean-François BRUN & Céline CARRERE & Patrick GUILLAUMONT & Jaime MELO DE, 2002. "Has Distance Died? Evidence from a Panel Gravity Model," Working Papers 200215, CERDI.
- Claudia M. Buch & Jörn Kleinert & Farid Toubal, 2003.
"The Distance Puzzle: On the Interpretation of the Distance Coefficient in Gravity Equations,"
Kiel Working Papers
1159, Kiel Institute for the World Economy.
- Buch, Claudia M. & Kleinert, Jorn & Toubal, Farid, 2004. "The distance puzzle: on the interpretation of the distance coefficient in gravity equations," Economics Letters, Elsevier, vol. 83(3), pages 293-298, June.
- Feenstra, Robert C, 2002. "Border Effects and the Gravity Equation: Consistent Methods for Estimation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 491-506, December.
- James E. Anderson & Eric van Wincoop, 2001.
"Gravity with Gravitas: A Solution to the Border Puzzle,"
NBER Working Papers
8079, National Bureau of Economic Research, Inc.
- 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.
- 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.
- Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
- 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.
- Anne-Célia Disdier & Keith Head, 2004.
"The Puzzling Persistence of the Distance Effect on Bilateral Trade,"
Development Working Papers
186, Centro Studi Luca d\'Agliano, University of Milano.
- Anne-Célia Disdier & Keith Head, 2008. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 37-48, February.
- Thierry Mayer & Keith Head, 2002. "Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade," Working Papers 2002-01, CEPII research center.
- Eaton Jonathan & Tamura Akiko, 1994.
"Bilateralism and Regionalism in Japanese and U.S. Trade and Direct Foreign Investment Patterns,"
Journal of the Japanese and International Economies,
Elsevier, vol. 8(4), pages 478-510, December.
- Jonathan Eaton & Akilo Tamura, 1994. "Bilateralism and Regionalism in Japanese and U.S. Trade and Direct Foreign Investment Patterns," Boston University - Institute for Economic Development 48, Boston University, Institute for Economic Development.
- Jonathan Eaton & Akiko Tamura, 1995. "Bilateralism and Regionalism in Japanese and U.S. Trade and Direct Foreign Investment Patterns," NBER Working Papers 4758, National Bureau of Economic Research, Inc.
- repec:lmu:muenar:20646 is not listed on IDEAS
- Dieter Schumacher & Boriss Siliverstovs, 2006. "Home-Market and Factor-Endowment Effects in a Gravity Approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(2), pages 330-353, July.
- David T Coe & Arvind Subramanian & Natalia T Tamirisa, 2007. "The Missing Globalization Puzzle: Evidence of the Declining Importance of Distance," IMF Staff Papers, Palgrave Macmillan, vol. 54(1), pages 34-58, May.
- Edward E. Leamer & James Levinsohn, 1994.
"International Trade Theory: The Evidence,"
NBER Working Papers
4940, National Bureau of Economic Research, Inc.
- Rikhil Bhavnani & Natalia T. Tamirisa & Arvind Subramanian & David T. Coe, 2002. "The Missing Globalization Puzzle," IMF Working Papers 02/171, International Monetary Fund.
- Berthelon, Matias & Freund, Caroline, 2004.
"On the conservation of distance in international trade,"
Policy Research Working Paper Series
3293, The World Bank.
- Berthelon, Matias & Freund, Caroline, 2008. "On the conservation of distance in international trade," Journal of International Economics, Elsevier, vol. 75(2), pages 310-320, July.
- Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August.
When requesting a correction, please mention this item's handle: RePEc:cii:cepiei:2008-3te. 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: ()
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.