Agglomeration Matters for Trade

Enrique Moral-Benito

No 85, 2013 Meeting Papers from Society for Economic Dynamics

Abstract: We use a unique administrative dataset of Spanish exporters to document the existence of exporters' geographical agglomeration by export-destination. We reveal that firms selling to countries with worse business regulations, dissimilar language and different currency tend to cluster signicantly more. We then assess the implications of exporters' geographical agglomeration for firms' behaviour and for the estimated welfare gains from trade. On the one hand, we find that exporters engage in more stable trade relationships with those countries that are the export-destinations of nearby firms. On the other, we introduce agglomeration in a model of international trade a la Melitz (2003). Using our Spanish firm-level data, we find that relative to a model without agglomeration, accounting for this phenomenon increases by 44% the elasticity of welfare with respect to fixed trade-costs.

Date: 2013
New Economics Papers: this item is included in nep-bec, nep-geo and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2013/paper_85.pdf (application/pdf)

Related works:
Working Paper: Agglomeration matters for trade (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed013:85

Access Statistics for this paper

More papers in 2013 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann (chuichuiche@gmail.com).