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The Evolution of International Trade on the Extensive and Intensive Margins


  • Peter McQuade

    () (Institute for International Integration Studies, Trinity College Dublin)


This paper seeks to identify the relation between a country's trade share and its income level. We ask whether this relation changed between 1995 and 2005 and whether there has been an observable shift toward increased trade variety for high income countries. In order to address these questions, we employ a trade decomposition method that consists of dividing the overall trade share of a given country into the extensive and intensive margins and the latter is further decomposed into price and quantity components. A country's relative income has a smaller effect on trade share vis-a-vis the EU 15 than was previously the case, primarily because relatively low income countries now export large quantities of goods also.

Suggested Citation

  • Peter McQuade, 2010. "The Evolution of International Trade on the Extensive and Intensive Margins," The Institute for International Integration Studies Discussion Paper Series iiisdp325, IIIS, revised Apr 2010.
  • Handle: RePEc:iis:dispap:iiisdp325

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    References listed on IDEAS

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    More about this item


    International Trade; Product Differentiation; Economic Integration; Exports;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies


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