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A Globally Consistent Framework for Reliability-based Trade Statistics Reconciliation in the Presence of an Entrepôt

Author

Listed:
  • Zhi Wang

    (China Center for Economic Research)

  • Mark Gehlhar
  • Shunli Yao

Abstract

This paper develops a mathematicla programming model to reconcile trade statistics subject to a set of global consistency conditions in the presence of an entrepot. Initial data reliability serves a key function for governing the magnitude of adjustment. Through a two-stage optimization procedure, the adjusted trade statistics are achived as solutions to a system of simultaneous equations that minimize a quadratic penalty function. As an empirical illustration, the model is applied to reconcile the 2004 trade statistics reported by China, Hong Kong, and their major trading partners, initialized with detailed estimates of bilateral trade flows, re-export markups, cif/fob ratios and data reliability indexes.

Suggested Citation

  • Zhi Wang & Mark Gehlhar & Shunli Yao, 2007. "A Globally Consistent Framework for Reliability-based Trade Statistics Reconciliation in the Presence of an Entrepôt," Trade Working Papers 22715, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:tradew:22715
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    File URL: http://www.eaber.org/node/22715
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    References listed on IDEAS

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    1. Weale, Martin, 1985. "Testing Linear Hypotheses on National Account Data," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 685-689, November.
    2. Wang, Zhi & Gehlhar, Mark & Yao, Shunli, 2007. "Reconciling Trade Statistics from China, Hong Kong and Their Major Trading Partners--A Mathematical Programming Approach," GTAP Technical Papers 2517, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    3. Gehlhar, Mark J., 1996. "Reconciling Bilateral Trade Data For Use In Gtap," Technical Papers 28714, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Robert C. Feenstra & Gordon H. Hanson, 2005. "Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 729-761.
    5. Robert C. Feenstra, 1999. "Discrepancies in International Data: An Application to China-Hong Kong Entrepot Trade," American Economic Review, American Economic Association, vol. 89(2), pages 338-343, May.
    6. Robert C. Feenstra & Gordon H. Hanson, 2004. "Intermediaries in Entrepôt Trade: Hong Kong Re‐Exports of Chinese Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(1), pages 3-35, March.
    7. Robert C. Feenstra & Wen Hai & Wing T. Woo & Shunli Yao, "undated". "The U.S.-China Bilateral Trade Balance: It'S Size And Determinants," Department of Economics 98-09, California Davis - Department of Economics.
    8. K. C. Fung & Lawrence J. Lau & Yanyan Xiong, 2006. "Adjusted Estimates Of United States–China Bilateral Trade Balances: An Update," Pacific Economic Review, Wiley Blackwell, vol. 11(3), pages 299-314, October.
    9. Fung, K. C. & Lau, Lawrence J., 2003. "Adjusted estimates of United States-China bilateral trade balances: 1995-2002," Journal of Asian Economics, Elsevier, vol. 14(3), pages 489-496, June.
    10. Richard Stone, 1984. "Balancing the National Accounts: The Adjustment of Initial Estimates — A Neglected Stage in Measurement," Palgrave Macmillan Books, in: A. Ingham & A. M. Ulph (ed.), Demand, Equilibrium and Trade, chapter 11, pages 191-212, Palgrave Macmillan.
    11. Richard Stone & D. G. Champernowne & J. E. Meade, 1942. "The Precision of National Income Estimates," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 9(2), pages 111-125.
    12. Patrick Canning & Zhi Wang, 2005. "A Flexible Mathematical Programming Model to Estimate Interregional Input–Output Accounts," Journal of Regional Science, Wiley Blackwell, vol. 45(3), pages 539-563, August.
    13. K. C. Fung, 1998. "Accounting for Chinese Trade: Some National and Regional Considerations," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 173-204, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Sasidaran Gopalan & Ramkishen S. Rajan, 2016. "Revisiting Bilateral Foreign Direct Investment Inflows into BRIC Economies," Global Policy, London School of Economics and Political Science, vol. 7(4), pages 510-520, November.

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    More about this item

    Keywords

    trade statistics reconciliation; entrepot trade; data reliability; global consistency;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access

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