Indirect measures of trade costs: Limitations and caveats

Antoine Gervais

Economics Letters, 2019, vol. 176, issue C, 96-102

Abstract: Trade barriers, which include transportation costs, tariffs, language barriers, and bureaucratic red tape, play a key role in the determination of trade flows. Because “direct” measures are only available for a few components, researchers have developed so-called “indirect” measures of trade costs, which estimate bilateral trade integration from cross-sectional variation in observed trade flows. The paper explores the theoretical and empirical determinants of these indirect measures of trade costs. The results suggest that, while they do capture variation in trade barriers, the indirect measures may also reflect variation in other factors, such as differences in tastes and production costs.

Keywords: International trade; Monopolistic competition; Production costs; Product quality; Trade costs (search for similar items in EconPapers)
JEL-codes: F12 F15 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176518305214
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecolet:v:176:y:2019:i:c:p:96-102

DOI: 10.1016/j.econlet.2018.12.027

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().