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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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    File URL: https://economicdynamics.org/meetpapers/2016/paper_973.pdf
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    References listed on IDEAS

    as
    1. Thomas Chaney, 2014. "The Network Structure of International Trade," American Economic Review, American Economic Association, vol. 104(11), pages 3600-3634, November.
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    4. Treb Allen, 2014. "Information Frictions in Trade," Econometrica, Econometric Society, vol. 82, pages 2041-2083, November.
    5. Sugita, Yoichi & Teshima, Kensuke & Seira, Enrique, 2016. "Assortative matching of exporters and importers," IDE Discussion Papers 610, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    6. Tor Jakob Klette & Samuel Kortum, 2004. "Innovating Firms and Aggregate Innovation," Journal of Political Economy, University of Chicago Press, vol. 112(5), pages 986-1018, October.
    7. Albornoz, Facundo & Calvo Pardo, Héctor F. & Corcos, Gregory & Ornelas, Emanuel, 2012. "Sequential exporting," Journal of International Economics, Elsevier, vol. 88(1), pages 17-31.
    8. Andrew B. Bernard & Andreas Moxnes & Karen Helene Ulltveit-Moe, 2018. "Two-Sided Heterogeneity and Trade," The Review of Economics and Statistics, MIT Press, vol. 100(3), pages 424-439, July.
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    13. Marcela Eslava & James Tybout & David Jinkins & C. Krizan & Jonathan Eaton, 2015. "A Search and Learning Model of Export Dynamics," 2015 Meeting Papers 1535, Society for Economic Dynamics.
    14. Colin J. Hottman & Stephen J. Redding & David E. Weinstein, 2016. "Quantifying the Sources of Firm Heterogeneity," The Quarterly Journal of Economics, Oxford University Press, vol. 131(3), pages 1291-1364.
    15. Angelo Mele, 2010. "A structural model of segregation in social networks," CeMMAP working papers CWP32/10, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Andrew B. Bernard & Andreas Moxnes, 2018. "Networks and Trade," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 65-85, August.
    2. Magne Mogstad & Emmanuel Dhyne & Ayumu Kikkawa & Felix Tintelnot, 2017. "Trade and Domestic Production Networks," 2017 Meeting Papers 381, Society for Economic Dynamics.
    3. repec:aea:jeclit:v:56:y:2018:i:2:p:565-619 is not listed on IDEAS
    4. 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.
    5. Ryan Chahrour & Rosen Valchev, 2017. "International Medium of Exchange: Privilege and Duty," Boston College Working Papers in Economics 934, Boston College Department of Economics.
    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.

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