MEASURING TRADE COSTS FROM RELATIVE PRICES: THE ROLE OF LOCATION AND GOODS CHARACTERISTICS

In Huh () and Inkoo Lee
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In Huh: School of Economics, Chonnam National University, 77 Yongbong-ro, Buk-gu, Gwangju, Republic of Korea 500-757, Republic of Korea

The Singapore Economic Review (SER), 2014, vol. 59, issue 05, 1-10

Abstract: This paper estimates the trade costs from international relative prices, and studies the economic determinants of implied trade costs. We find that the magnitude of trade costs depends on the characteristics of both the type of good and set of locations under examination. In particular, it is found that higher non-traded input share and trade barriers, and lower tradability of goods lead to a larger trade cost, as does a lower proximity of geographic distance between locations.

Keywords: Trade costs; threshold autoregressive; non-traded input; trade share; real exchange rates; F30; C20 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1142/S0217590814500416

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