Market Access and Intermediate Goods Trade

Kazunobu Hayakawa

No 208, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: The role of importer access to the finished goods market in intermediate goods trade is examinedby estimating the gravity-like equation derived from the NEG model. Importer access to demandfor finished goods is calculated by using the estimates in the gravity equation for finished goodstrade, and then intermediate goods trade is regressed on the importer access. Results indicate thatimports of intermediate goods are sensitive not only to the magnitude of importer demand forfinished goods but also to the demand of neighboring countries. Using results of the regression,the impact of US finished goods market expansion on intermediate goods trade in each country issimulated.

Keywords: Gravity; Intermediate Goods Trade; OECD; Trade theory (search for similar items in EconPapers)
JEL-codes: F12 F14 R12 (search for similar items in EconPapers)
Date: 2009-07-01
New Economics Papers: this item is included in nep-int
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 208. 2009-07-01

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