Canadian Imports and Exports by Origin and Destination: A Semi-flexible Approach

Ulrich Kohli

Canadian Journal of Economics, 1994, vol. 27, issue 3, 580-603

Abstract: This paper models the geographical composition of Canadian foreign trade. Imports and exports are disaggregated into nine regions that together cover most of the OECD area. The author uses both the flexible and the semiflexible versions of the symmetric normalized quadratic functional form. The reduction in flexibility allows for large savings in the number of parameters and yet it is not incompatible with the data. The author's results suggest that there are significant substitution possibilities in Canadian foreign trade and that trade diversion towards the United States and EFTA is likely to be important in the event of increased E.C. protectionism.

Date: 1994
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