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Income-related biases in international trade : what do trademark registration data tell us?

  • Carsten Fink
  • Javorcik,Beata
  • Mariana Spatareanu

Economists have long recognized that richer countries trade more among themselves than with poorer economies due to a closer match of exporter supply structures and importer preferences. In the literature, the closeness of supply and demand has traditionally been determined by the quality of products-as expressed in the so-called Linder hypothesis. This paper examines an extension of the Linder hypothesis by also considering the extent of horizontal product differentiation as another determinant of the closeness of supply and demand. The empirical analysis employs information on international trademark registrations to test whether richer countries import more from countries whose exports are of higher quality and exhibit a greater degree of product differentiation. The results lend support to the hypothesis in most consumer goods sectors but not in intermediate goods sectors.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3150.

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Date of creation: 01 Oct 2003
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Handle: RePEc:wbk:wbrwps:3150
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  1. repec:oup:restud:v:58:y:1991:i:1:p:63-80 is not listed on IDEAS
  2. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
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  19. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
  20. 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.
  21. Fink, Carsten & Mattoo, Aaditya & Neagu, Ileana Cristina, 2005. "Assessing the impact of communication costs on international trade," Journal of International Economics, Elsevier, vol. 67(2), pages 428-445, December.
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