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Lerner meets Gravity

Author

Listed:
  • Joseph Francis Francois
  • Miriam Manchin

    (UCL School of Slavonic and East European Studies)

Abstract

We examine the linkages between import policy and export performance, extending classic macroeconomic trade effects to more recent concepts from the modern literature on gravity models. We also examine these effects empirically with a panel of global and bilateral trade spanning 15 years. Our emphasis on the role of import policy (i.e. tariffs) of exporters as an explanation of trade volumes contrasts with the recent emphasis on importer policy in the gravity literature. It also reinforces the growing body of evidence on the importance of economic environmental (policy and infrastructure) conditions in explaining relative export performance.

Suggested Citation

  • Joseph Francis Francois & Miriam Manchin, 2013. "Lerner meets Gravity," UCL SSEES Economics and Business working paper series 123, UCL School of Slavonic and East European Studies (SSEES).
  • Handle: RePEc:see:wpaper:2013:123
    as

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    File URL: http://discovery.ucl.ac.uk/1390728/1/LernerJanuary2013.pdf
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    References listed on IDEAS

    as
    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    2. Jaime de MELO & Sherman ROBINSON, 2015. "Product Differentiation And The Treatment Of Foreign Trade In Computable General Equilibrium Models Of Small Economies," World Scientific Book Chapters,in: Modeling Developing Countries' Policies in General Equilibrium, chapter 2, pages 21-41 World Scientific Publishing Co. Pte. Ltd..
    3. Anderson, James E & Neary, J Peter, 1992. "Trade Reform with Quotas, Partial Rent Retention, and Tariffs," Econometrica, Econometric Society, vol. 60(1), pages 57-76, January.
    4. Edward John Ray, 1975. "The Impact of Monopoly Pricing on the Lerner Symmetry Theorem," The Quarterly Journal of Economics, Oxford University Press, vol. 89(4), pages 591-602.
    5. Stephen Tokarick, 2006. "Does Import Protection Discourage Exports?," IMF Working Papers 06/20, International Monetary Fund.
    6. 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.
    7. William Kaempfer & Edward Tower, 1982. "The balance of payments approach to trade tax symmetry theorems," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 118(1), pages 148-165, March.
    8. J. Peter Neary & Albert G. Schweinberger, 1986. "Factor Content Functions and the Theory of International Trade," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 421-432.
    9. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    10. Ronald I. McKinnon, 1966. "Intermediate Products and Differential Tariffs: A Generalization of Lerner's Symmetry Theorem," The Quarterly Journal of Economics, Oxford University Press, vol. 80(4), pages 584-615.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    policy and aggregate exports; Lerner symmetry; gravity model;

    JEL classification:

    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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