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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)

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    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.

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    File URL: http://www.tcd.ie/iiis/documents/discussion/pdfs/iiisdp325.pdf
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    Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp325.

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    Length: 44 pages
    Date of creation: Mar 2010
    Date of revision: Apr 2010
    Handle: RePEc:iis:dispap:iiisdp325
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    Web page: http://www.tcd.ie/iiis/

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    4. David Hummels & Alexandre Skiba, 2002. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," NBER Working Papers 9023, National Bureau of Economic Research, Inc.
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    8. Rikhil Bhavnani & Natalia T. Tamirisa & Arvind Subramanian & David T. Coe, 2002. "The Missing Globalization Puzzle," IMF Working Papers 02/171, International Monetary Fund.
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    10. Jansen, Marion & Lennon, Carolina & Piermartini, Roberta, 2009. "Exposure to external country specific shocks and income volatility," WTO Staff Working Papers ERSD-2009-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    11. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    12. Lionel Fontagné & Guillaume Gaulier & Soledad Zignago, 2007. "Specialisation across Varieties within Products and North-South Competition," Working Papers 2007-06, CEPII research center.
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    15. George Alessandria & Joseph P. Kaboski, 2011. "Pricing-to-Market and the Failure of Absolute PPP," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(1), pages 91-127, January.
    16. Lawless, Martina & Whelan, Karl, 2008. "Where do Firms Export, How Much and Why?," Research Technical Papers 6/RT/08, Central Bank of Ireland.
    17. Peter K. Schott, 2004. "Across-product Versus Within-product Specialization in International Trade," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 646-677, May.
    18. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Boston College Working Papers in Economics 593, Boston College Department of Economics.
    19. Natalie Chen & Dennis Novy, 2009. "International Trade Integration: A Disaggregated Approach," CEP Discussion Papers dp0908, Centre for Economic Performance, LSE.
    20. Raphael Kaplinsky & Amelia U. Santos-Paulino, 2006. "A disaggregated analysis of EU imports: the implications for the study of patterns of trade and technology," Cambridge Journal of Economics, Oxford University Press, vol. 30(4), pages 587-611, July.
    21. Juan Carlos Hallak, 2003. "The Effect of Cross-Country Differences in Product Quality on the Direction of International Trade 2002," Working Papers 493, Research Seminar in International Economics, University of Michigan.
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