External Imbalances and the Extensive Margin of Trade

Many of the facts about the extensive margin of trade—which firms export, and how many products are sent to how many destinations— are consistent with a surprisingly large class of trade models because of the sparse nature of trade data. We propose a statistical model to account for sparsity, formalizing the assignment of trade shipments to country, product, and firm categories as balls falling into bins. The balls-and-bins model quantitatively reproduces the pattern of zero product- and firm-level trade flows across export destinations, and the frequency of multiproduct, multidestination exporters. In contrast, balls-and-bins overpredicts the fraction of exporting firms. ( JEL F11, F14)

Download Full-text

Internet Technology and the Extensive Margin of Trade: Evidence from eBay in Emerging Economies

Review of Development Economics ◽

10.1111/rode.12148 ◽

2015 ◽

Vol 19 (2) ◽

pp. 375-386 ◽

Cited By ~ 6

Author(s):

Andreas Lendle ◽

Pierre-Louis Vézina

Keyword(s):

Emerging Economies ◽

Internet Technology ◽

Extensive Margin ◽

Extensive Margin Of Trade

Download Full-text

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)

Download Full-text

Synchronization of Business Cycles and the Extensive Margin of Trade

10.20955/es.2015.15 ◽

2015 ◽

Vol 2015 (15) ◽

Author(s):

Ana Maria Santacreu

Keyword(s):

Business Cycles ◽

Extensive Margin ◽

Extensive Margin Of Trade

Download Full-text

The DNA of New Exporters: Spin-offs and FDI at the Extensive Margin of Trade

American Economic Review: Insights ◽

10.1257/aeri.20190379 ◽

2020 ◽

Vol 2 (3) ◽

pp. 397-408

Author(s):

Bernardo S. Blum ◽

Sebastian Claro ◽

Ignatius Horstmann ◽

Trevor Tombe

Keyword(s):

Foreign Direct Investment ◽

Direct Investment ◽

Survival Rates ◽

Export Growth ◽

Extensive Margin ◽

High Survival ◽

New Business ◽

Key Features ◽

Business Entities ◽

Extensive Margin Of Trade

Other than that new exporters account for a large part of aggregate export growth, we know little else. We document that aggregate export growth in Chile is driven by only a few new exporters. These exporters are new business entities, operate new plants, and behave much like experienced exporters: they start large and have high survival rates. Moreover, 70 percent of these new firms are owned by existing businesses and are likely the by-product of either domestic spin-offs or foreign direct investment (24 percent). By focusing on the average new exporter, the existing models of new exporter dynamics miss these key features of export growth. (JEL F14, F23, L22, L60, M13, O14, O19)

Download Full-text

Book Reviews

Journal of Economic Literature ◽

10.1257/jel.49.3.719.r12 ◽

2011 ◽

Vol 49 (3) ◽

pp. 747-749

Keyword(s):

International Trade ◽

Product Variety ◽

University Of California ◽

Extensive Margin ◽

Columbia University ◽

Consumer Benefits ◽

Export Variety ◽

The University ◽

Extensive Margin Of Trade

David E. Weinstein of Columbia University reviews “Product Variety and the Gains from International Trade” by Robert C. Feenstra. The EconLit Abstract of the reviewed work begins “Explores the methods that have been developed to measure the product variety of imports and exports in international trade and the gains from trade due to product variety. Discusses consumer benefits from import variety; producer benefits from export variety; the extensive margin of trade and country productivity; and product variety and the measurement of real gross domestic product. Feenstra is Professor of Economics and C. Bryan Cameron Distinguished Chair in International Economics at the University of California, Davis. Index.”

Download Full-text

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

International Organization ◽

10.1017/s0020818319000237 ◽

2019 ◽

Vol 73 (4) ◽

pp. 755-792 ◽

Cited By ~ 1

Author(s):

In Song Kim ◽

John Londregan ◽

Marc Ratkovic

Keyword(s):

Political Institutions ◽

Extensive Margin ◽

Intensive Margin ◽

Interpersonal Contact ◽

Extensive And Intensive Margins ◽

Political Networks ◽

Block Trade ◽

Lasso Estimator ◽

Trade Partners ◽

Extensive Margin 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.

Download Full-text