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Structural Estimation of Variety Gains from Trade Integration in Asia

d'Artis Kancs

Australian Economic Review, 2010, vol. 43, issue 3, 270-288

Abstract: "This article studies the variety gains of trade integration in Asia. Adopting a heterogeneous firm model of trade of monopolistic competition allowed us to estimate not only the welfare gains because of country specialisation, but also the variety gains arising from trade integration. The underlying structural parameters were estimated econometrically, based on a large panel of firm-level data for the Asian economies (ORIANA). Our empirical findings suggest that, when relaxing the assumption of firm homogeneity and accounting for export market entry costs, the gains from trade integration are higher than in conventional models with representative firms." Copyright (c)2010 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research.

Date: 2010
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