The Effects of Political Institutions on the Extensive and Intensive Margins of Trade

AbstractWe present a model of political networks that integrates both the choice of trade partners (the extensive margin) and trade volumes (the intensive margin). Our model predicts that regimes secure in their survival, including democracies as well as some consolidated authoritarian regimes, will trade more on the extensive margin than vulnerable autocracies, which will block trade in products that would expand interpersonal contact among their citizens. We apply a two-stage Bayesian LASSO estimator to detailed measures of institutional features and highly disaggregated product-level trade data encompassing 131 countries over a half century. Consistent with our model, we find that (a) political institutions matter for the extensive margin of trade but not for the intensive margin and (b) the effects of political institutions on the extensive margin of trade vary across products, falling most heavily on those goods that involve extensive interpersonal contact.

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What Determines Exports of Luxury Products? The Case of Cognac

Journal of Wine Economics ◽

10.1017/jwe.2017.2 ◽

2017 ◽

Vol 12 (1) ◽

pp. 37-58 ◽

Cited By ~ 5

Author(s):

Antoine Bouët ◽

Charlotte Emlinger ◽

Viola Lamani

Keyword(s):

Gross Domestic Product ◽

Descriptive Statistics ◽

Domestic Product ◽

Extensive Margin ◽

Intensive Margin ◽

Endogeneity Bias ◽

Luxury Products ◽

The Impact ◽

Extensive Margin Of Trade ◽

Jel Classifications

AbstractThis paper analyzes the determinants of Cognac brandy exports using a unique database on Cognac shipments to more than 140 destinations between 1996 and 2013. We use this database to construct descriptive statistics concerning the evolution of Cognac exports during this period. We also construct a database of protectionist policies that affect worldwide Cognac exports. We analyze the determinants of Cognac exports and base our empirical strategy on Heckman's (1979) procedure. We estimate successively the impact of geographical, demand and policy factors on the extensive margin of trade and the intensive margin of trade. We also control for the possibility of an endogeneity bias on the probability of trade. We show that i) as with other luxury products, the elasticity of Cognac exports to distance is negative, significant, and relatively small, while the elasticity to gross domestic product (GDP) is positive, significant, and relatively large; and ii) average customs duties do not have a significant impact on the intensive margin but significantly and positively affect the probability of trade. We discuss this last result and correct the endogeneity bias using tax revenues of importing countries in percentage of GDP as an instrument. (JEL Classifications: F10, F14)

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WHAT MATTERS FOR THE EXTENSIVE AND INTENSIVE MARGINS OF INTERNATIONAL TRADE? EVIDENCE FROM KOREAN EXPORTS

The Singapore Economic Review ◽

10.1142/s021759081250018x ◽

2012 ◽

Vol 57 (03) ◽

pp. 1250018 ◽

Cited By ~ 2

Author(s):

KICHUN KANG

Keyword(s):

International Trade ◽

Price Index ◽

External Environment ◽

Export Promotion ◽

Extensive Margin ◽

Suggested Model ◽

Intensive Margin ◽

Quantity Index ◽

Extensive And Intensive Margins ◽

What Matters

Recently, there has been increased interest in the distinction between the extensive margin (EM) and the intensive margin (IM) of international trade. Between 1988 and 2006, the growth of the EMs and IMs of Korean exports has been diverse across its destinations. This paper links each component of the trade value (EM, IM, price index and quantity index) to factors that have been identified as trade determinants in the suggested model. This paper finds that the destination GDP, distance, tariffs, language, existence of an export promotion agency (EPA), local infrastructure and import procedures have an effect on the EMs and IMs of Korea's exports, and the effect works largely through the IM. This paper examines the external environment that shapes the contributions of each of these margins of a country's exports.

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CHINA'S EXPORT MARGINS AND THEIR GROWTH SOURCES: AN ANALYSIS OF EXTENSIVE MARGIN AND INTENSIVE MARGIN

The Singapore Economic Review ◽

10.1142/s021759081350029x ◽

2013 ◽

Vol 58 (04) ◽

pp. 1350029 ◽

Cited By ~ 1

Author(s):

YONG-LIANG ZHAO ◽

DE-XUE LIU ◽

HUA-LIN PU ◽

ZI-HUI YANG

Keyword(s):

Small And Medium Enterprises ◽

Dominant Role ◽

Extensive Margin ◽

Intensive Margin ◽

Industrial Countries ◽

The Third ◽

Extensive And Intensive Margins ◽

Export Variety ◽

Import And Export ◽

Medium Enterprises

Based on the theoretical methods by Feenstra and others, this paper applies the empirical panel data of years 2000–2007 to measure the growth of China's provincial import and export for both extensive and intensive margins. Extensive margin reflecting the level of variety becomes a significant factor for China's export and is slightly higher than intensive margin. The empirical results indicate that emerging industrial countries have gradually become the important new markets for China's export variety. As for the variables affecting variety growth, trade barriers are found to play a dominant role as invisible constraints, and small and medium enterprises contribute significantly to variety growth, while foreign investment and market-oriented reforms have become the driving force. Moreover, trade variety has been identified as the third factor of economic growth, in addition to the two traditional factors (capital and labor).

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The Effects of Extensive and Intensive Margins of FDI on Domestic Employment: Microeconomic Evidence from Italy

The B E Journal of Economic Analysis & Policy ◽

10.1515/bejeap-2015-0023 ◽

2015 ◽

Vol 15 (4) ◽

pp. 2079-2109 ◽

Cited By ~ 105

Author(s):

Raffaello Bronzini

Keyword(s):

Foreign Direct Investment ◽

Foreign Investment ◽

Direct Investment ◽

Positive Relationship ◽

Extensive Margin ◽

Matching Method ◽

Intensive Margin ◽

Extensive And Intensive Margins ◽

Skill Composition ◽

Foreign Operations

Abstract In this paper we verify whether enterprises that have started to produce abroad have reduced employment at home after the first foreign investment (extensive margin). Next, we assess whether changes in foreign employment induce changes in domestic employment for a sample of multinationals that have already established activities abroad (intensive margin). Using matching method and diff-in-diffs estimates, we find that two years after the first foreign investment domestic employment of investing firms is slightly higher than that of domestic enterprises, but mainly among those that have undertaken horizontal foreign direct investment. In multinationals that have already activated foreign operations we find a positive relationship between foreign and domestic employment. Our findings suggest that the skill composition of domestic workforce does not change neither at the extensive nor at the intensive margin of FDI.

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A Literature Survey on Extensive and Intensive Margins in International Trade

Impact of Global Issues on International Trade - Advances in Finance, Accounting, and Economics ◽

10.4018/978-1-7998-8314-2.ch007 ◽

2021 ◽

pp. 124-136

Author(s):

Burcu Berke

Keyword(s):

International Trade ◽

Foreign Trade ◽

Literature Survey ◽

Export Growth ◽

Global Trade ◽

Extensive Margin ◽

Exporting Firms ◽

Trade Relations ◽

Extensive And Intensive Margins ◽

Trade Partners

Products and firms are homogeneous in traditional foreign trade theories; products show no horizontal or vertical differentiation. It is observed that growth in exports is only related to an increase in export quantity and that this is not decomposed into margins. Since Melitz's work, there has been an increase in studies that decompose the firms' heterogeneity and export growth in foreign trade into extensive and intensive margins. The concepts are addressed in the literature known as “new-new” foreign trade theories which include extensive margins, the number of exporting firms, the number of new trade partners, and the volume or variety of exported products. In brief, the growth of global trade is the result of new trade relations (extensive margin) or a rise in existing trade relations (intensive margin). As one of the rapidly developing trade theories in international economics, the main purpose of this study is to conduct a literature survey on the extensive and intensive margins of export growth.

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The Diffusion of Product Innovations

10.1093/oso/9780198816676.003.0009 ◽

2018 ◽

Author(s):

Paul Stoneman ◽

Eleonora Bartoloni ◽

Maurizio Baussola

Keyword(s):

Extensive Margin ◽

Intensive Margin ◽

Industry Sector ◽

Product Innovations ◽

Market Product ◽

Principal Finding ◽

Considerable Period

This chapter explores the patterns of adoption and use of original and new-to-market product innovations. Three levels of diffusion are identified: (i) the spreading of first use across countries (the extensive margin); (ii) the spreading of first use across users within countries (the intensive margin); and (iii) increasing intensity of use by adopters (firms or households). The principal finding is that diffusion often takes a considerable period of time, both across and within countries. Movement on the intensive margin continues for many years after diffusion on the extensive margin is completed. Intra-firm or household diffusion is also time-intensive, differs by industry sector, country, and technology, and continues even after inter-firm or household diffusion is complete. In addition, the diffusion of the production of product innovations may eventually mean that countries that were early producers are eventually replaced by countries that were late producers.

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Political parties in Canada: What determines entry, exit and the duration of their lives?

Party Politics ◽

10.1177/1354068818793659 ◽

2018 ◽

Vol 26 (5) ◽

pp. 543-554 ◽

Cited By ~ 3

Author(s):

J Stephen Ferris ◽

Marcel-Cristian Voia

Keyword(s):

Political Parties ◽

Political Party ◽

Public Funding ◽

Hazard Model ◽

Parametric Models ◽

Extensive Margin ◽

Finite Mixtures ◽

Entry And Exit ◽

Intensive Margin ◽

Economic Circumstance

Two margins of political party life in Canada since Confederation (1867) are analyzed—the extensive margin involving entry and exit (together with party turnover or churning) and the intensive margin determining survival length. The results confirm many hypotheses advanced to explain entry and exit—the importance of social and religious cleavage, election institutions, and economic circumstance. More novel are the findings that public election funding and periods with larger immigration flows have reinforced established parties at the expense of entrants and smaller sized parties. The intensive margin uses a discrete hazard model with discrete finite mixtures to confirm the Duverger-type presence of two distinct long-lived political parties surrounded by a fringe of smaller parties. Both parametric and semi-parametric models concur in finding that public funding and higher immigration flows are as successful in extending the life of established parties as in discouraging entry and exit.

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Pan[dem]ic! Rational Risk Avoidance During a Health Pandemic

10.1101/2021.05.28.21257983 ◽

2021 ◽

Author(s):

Edward N Okeke

Keyword(s):

Physical Examination ◽

Health Workers ◽

Primary Data ◽

Risk Compensation ◽

Extensive Margin ◽

Negative Effects ◽

Risk Avoidance ◽

Intensive Margin ◽

Present Evidence ◽

Reduce Risk

During a health pandemic health workers have to balance two competing objectives: their own welfare vs. that of their patients. Intuitively, attending to sick patients during a pandemic poses risks to health workers because some of these patients could be infected. One way to reduce risk is by reducing contact with patients. These changes could be on the extensive margin, e.g., seeing fewer patients; or, more insidiously, on the intensive margin, by reducing the duration/intensity of contact. This paper studies risk avoidance behavior during the Covid-19 pandemic and examines implications for patient welfare. Using primary data on thousands of patient-provider interactions between January 2019 and October 2020 in Nigeria, I present evidence of risk compensation by health workers along the intensive margin. For example, the probability that a patient receives a physical examination has dropped by about a third. I find suggestive evidence of negative effects on health outcomes.

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