Tools of the trade: trade flexibility with respect to margins and buyers

Frank Asche, Atle Oglend and Hans-Martin Straume ()
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Atle Oglend: University of Stavanger
Hans-Martin Straume: BI Norwegian Business School

Empirical Economics, 2021, vol. 61, issue 4, No 10, 1959-1983

Abstract: Abstract Access to highly disaggregated trade data allows for a more nuanced investigation of different margins of trade, and the factors known to influence them. In this paper, the number of importers and shipments to each importer is investigated together with the more traditional margins. Potential explanatory factors of these trade margins are combined from three literature strands in addition to the standard gravity variables; firm productivity, per-unit shipment costs and country-specific trade costs. The empirical results show, not unexpectedly, that insights from all these different strands of literature influence trade margins significantly. In particular, the number of shipments per importer increases with distance, degree of remoteness and per-shipment cost, and the number of importers decreases with the distance, remoteness and per-unit shipping cost. This indicates that increased trade costs make exporters economize in existing networks. Finally, disaggregating the data into three main product categories using Rauch’s classification, trade patterns are shown to vary by product group.

Keywords: Trade costs; Exporting; Margins of trade; Transaction data; Heterogeneous firms (search for similar items in EconPapers)
JEL-codes: F10 F14 L11 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s00181-020-01923-2

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