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Truncated productivity distributions and the intensive trade margin

Author

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  • Coughlin, Cletus C.
  • Bandyopadhyay, Subhayu

Abstract

We derive a novel analytical relationship to show that for an upper truncated Pareto distribution average firm exports fall with variable trade costs and rise with the truncation limit. We extend the analysis to consider truncated lognormal and Fréchet distributions.

Suggested Citation

  • Coughlin, Cletus C. & Bandyopadhyay, Subhayu, 2020. "Truncated productivity distributions and the intensive trade margin," Economics Letters, Elsevier, vol. 196(C).
    • Handle: RePEc:eee:ecolet:v:196:y:2020:i:c:s016517652030358x
    DOI: 10.1016/j.econlet.2020.109596
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    References listed on IDEAS

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    1. Peter J. Klenow & Sergii Meleshchuk & Martha Denisse Pierola & Andres Rodriguez-Clare, 2018. "The Intensive Margin in Trade," IMF Working Papers 2018/259, International Monetary Fund.
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    9. 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.
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    Cited by:

    1. Defever, Fabrice & Riaño, Alejandro, 2022. "Firm-destination heterogeneity and the distribution of export intensity," Economics Letters, Elsevier, vol. 219(C).

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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