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Structural gravity equations with intensive and extensive margins

Matthieu Crozet () and Pamina Koenig

Canadian Journal of Economics, 2010, vol. 43, issue 1, 41-62

Abstract: Recent trade models with heterogeneous firms have changed the interpretation of gravity equations. Chaney (2008) shows that the effect of distance on the number of exporters and average exports depends on key parameters characterizing the elements of market structure. We use firm-level export data to estimate the structural parameters of Chaney's model. Controlling for the fixed costs of exporting, our estimated parameters match, for 28 out of 34 industries, the model's theoretical predictions. Our industry parameters allow us to evaluate separately the effect of transport costs and tariffs on trade, without having to resort to detailed data on trade frictions.

JEL-codes: F12 (search for similar items in EconPapers)
Date: 2010
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Related works:
Working Paper: Structural gravity equation with intensive and extensive margins (2010)
Working Paper: Structural Gravity Equations with Intensive and Extensive Margins (2008) Downloads
Working Paper: Structural gravity equations with intensive and extensive margins (2007) Downloads
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