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Structural gravity equations with intensive and extensive margins

Matthieu Crozet () and Pamina Koenig

Canadian Journal of Economics/Revue canadienne d'économique, 2010, vol. 43, issue 1, 41-62

Abstract: 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. Les modèles de commerce international avec firmes hétérogènes ont modifié l'interprétation des équations de gravité (Chaney 2008). L'effet de la distance sur le nombre d'exportateurs et la valeur moyenne exportée dépend d'un ensemble de paramètres caractérisant l'organisation du marché. Cet article mobilise des données individuelles sur les exportateurs français pour conduire une estimation structurelle de ces paramètres. Il confirme la pertinence du cadre théorique; pour 28 secteurs sur 34, les paramètres estimés sont conformes aux attentes théoriques. Il montre aussi que les coûts de transport ont un impact très différent de celui des droits de douanes, et que l'impact de l'ouverture commerciale dépend fortement de l'organisation des marchés.

Date: 2010
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https://doi.org/10.1111/j.1540-5982.2009.01563.x

Related works:
Journal Article: Structural gravity equations with intensive and extensive margins (2010) Downloads
Working Paper: Structural gravity equation with intensive and extensive margins (2010)
Working Paper: Structural gravity equation with intensive and extensive margins (2010)
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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