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Two-sided Search in International Markets

Author

Listed:
  • James Tybout

    (Pennsylvania State University)

  • David Jinkins

    (Copenhagen Business School)

  • Daniel Yi Xu

    (Duke University)

  • Jonathan Eaton

    (Pennsylvania State University)

Abstract

We develop a dynamic model of the many-to-many matching processes through which international business relationships are formed. Our formulation characterizes exporters' and importers' search efforts as functions of their type, their current portfolio of business partners, and the market conditions they face. After calibrating our model to customs records on Colombian retailers, we use it to study the steady state and transitory effects of China's emergence as a major supplier of consumer goods. In doing so we focus on the induced changes in matching patterns, the associated reallocation of rents across businesses, and the net effects on consumer welfare.

Suggested Citation

  • James Tybout & David Jinkins & Daniel Yi Xu & Jonathan Eaton, 2016. "Two-sided Search in International Markets," 2016 Meeting Papers 973, Society for Economic Dynamics.
    • Handle: RePEc:red:sed016:973
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    References listed on IDEAS

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    Cited by:

    1. Krolikowski, Pawel M. & McCallum, Andrew H., 2021. "Goods-market frictions and international trade," Journal of International Economics, Elsevier, vol. 129(C).
    2. Andrew B. Bernard & Andreas Moxnes, 2018. "Networks and Trade," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 65-85, August.
    3. Jaerim Choi, 2021. "Two-sided heterogeneity, endogenous sharing, and international matching markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(2), pages 473-509, September.
    4. Emmanuel Dhyne & Ayumu Ken Kikkawa & Magne Mogstad & Felix Tintelnot, 2021. "Trade and Domestic Production Networks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(2), pages 643-668.
    5. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2018. "Global Firms," Journal of Economic Literature, American Economic Association, vol. 56(2), pages 565-619, June.
    6. Jie Bai & Maggie Chen & Daniel Xu, 2018. "Search and Information Frictions on Global E-Commerce Platforms: Evidence from Aliexpress," Working Papers 18-17, NET Institute.
    7. Ryan Chahrour & Rosen Valchev, 2017. "International Medium of Exchange: Privilege and Duty," Boston College Working Papers in Economics 934, Boston College Department of Economics.
    8. Khorshed Alam & Mohammad Afshar Ali & Michael Erdiaw-Kwasie & Md Shahiduzzaman & Eswaran Velayutham & Peter A. Murray & Retha Wiesner, 2022. "Impact of ICTs on Innovation and Performance of Firms: Do Start-ups, Regional Proximity and Skills Matter?," Sustainability, MDPI, vol. 14(10), pages 1-18, May.
    9. Carballo, Jerónimo & Rodriguez Chatruc, Marisol & Salas Santa, Catalina & Volpe Martincus, Christian, 2022. "Online business platforms and international trade," Journal of International Economics, Elsevier, vol. 137(C).
    10. Brancaccio, Giulia & Kalouptsidi, Myrto & Papageorgiou, Theodore, 2020. "A guide to estimating matching functions in spatial models," International Journal of Industrial Organization, Elsevier, vol. 70(C).
    11. Carla Henriques & Clara Viseu, 2022. "Are ERDFs Devoted to Boosting ICTs in SMEs Inefficient? A Three-Stage SBM Approach," Sustainability, MDPI, vol. 14(17), pages 1-20, August.

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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