Structural gravity equation with intensive and extensive margins
Recent trade models with heterogenous firms have changed the interpretation of gravity equations. Chaney (2008) shows that the effect of distance on the number of exporters and average exports depend on key parameters characterizing the elements of market structure. We use firm-level export data to estimate the structural parameters of Chaney's model. Controlling for the fixed costs of exporting, our estimated parameters match, for 28 out of 34 industries, the model's theoretical predictions. Our industry parameters allow us to evaluate separately the effect of transport costs and tariffs on trade, without having to resort to detailed data on trade frictions.
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|Date of creation:||Feb 2010|
|Publication status:||Published in Canadian Journal of Economics / Revue Canadienne d'Économique, Wiley, 2010, 43 (1), pp.41-62. 〈10.1111/j.1540-5982.2009.01563.x〉|
|Note:||View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00610937|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
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- Pierre-Philippe Combes & Miren Lafourcade, 2005.
"Transport costs: measures, determinants, and regional policy implications for France,"
Journal of Economic Geography,
Oxford University Press, vol. 5(3), pages 319-349, June.
- Miren Lafourcade & Pierre-Philippe Combes, 2005. "Transport Costs: Measures, Determinants and Regional Policy Implications for France," Post-Print halshs-00754078, HAL.
- Hélène Erkel-Rousse & Daniel Mirza, 2002. "Import price elasticities: reconsidering the evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 35(2), pages 282-306, May.
- Erkel-Rousse, H. & Mirza, D., 2000. "Import Price-Elasticities : Reconsidering the Evidence," Papiers d'Economie MathÃ©matique et Applications 2000.52, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Helene Erkel-Rousse & Daniel Mirza, 2000. "Import Price-Elastcities: Reconsidering the Evidence," Econometric Society World Congress 2000 Contributed Papers 0909, Econometric Society.
- Giorgio Barba Navaretti & Anthony J. Venables, 2006. "Multinational Firms in the World Economy," Economics Books, Princeton University Press, edition 1, number 7832. Full references (including those not matched with items on IDEAS)
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