The Impact of Global Recession on Japan's Trade: Extensive and Intensive Margins in the Crisis (in Japanese)

The financial crisis in 2008 caused worldwide credit shrinkage, and the world economy faced recession. The trade volume of Japan drastically decreased by half in only four months after the crisis compared with the year-ago month. The issue regarding how the global recession has caused the rapid trade reduction is of great interest in researcher and administrative official. This paper analyzes the impact of the global recession on the trade using the monthly trade statistics of Japan subdivided to the detailed commodity level for the period of January 2007 to March 2010. In this analysis, first, the change in the total volume of trade is divided into two components, i.e., extensive margin defined as a change in the number of commodities and the number of countries of dealings, and intensive margin defined as a change in the average value. Second, the gravity model is estimated to examine the possible different magnitude of trade determinants on each component before and behind crisis. From the results, it is clearly observed that the average value of trade, that is, intensive margin has sharply declined after the crisis, and it is suggested that fixed costs related to the trade entry be substantial. Further, it is found that the impact of economic size of the importing country increased remarkably after the crisis, and the slowdown in demand in each country strongly affected intensive margin in the trade reduction.