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The missing trade of China: balls-and-bins model

Author

Listed:
  • Huimin Shi

    (Renmin University of China)

  • Zheng Jiang

    (Central University of Finance and Economics)

Abstract

Our paper applies the balls-and-bins model to China’s shipment level trade data of 2005. Similar to the results of the US data, we find that the balls-and-bins model matches the numbers and the gravity patterns of zero trade flows both at the country-product and country-firm levels reasonably well, but fails to predict the percentage of exporting firms as in the data. However, different from the results of the US data, we find that the model fails to predict the percentages of the single-product, single-destination, or single-product and single-destination exporting firms as in the data.

Suggested Citation

  • Huimin Shi & Zheng Jiang, 2016. "The missing trade of China: balls-and-bins model," Empirical Economics, Springer, vol. 50(4), pages 1511-1526, June.
    • Handle: RePEc:spr:empeco:v:50:y:2016:i:4:d:10.1007_s00181-015-0987-y
    DOI: 10.1007/s00181-015-0987-y
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    References listed on IDEAS

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    1. 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.
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    4. Elhanan Helpman & Paul Krugman, 1987. "Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026258087x, December.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Extensive margin; Balls-and-bins; China’s trade;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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