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Reconciling Trade Statistics from China, Hong Kong and Their Major Trading Partners--A Mathematical Programming Approach

Zhi Wang (), Mark Gehlhar and Shunli Yao

GTAP Technical Papers from Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University

Abstract: This paper develops a mathematical programming model to simultaneously estimate re-export markups and reconcile bilateral trade statistics between China, Hong Kong, and their trading partners. The model is applied to sector level trade flows to resolve discrepant reporting in an efficient manner. Adjustments in trade flows are based upon statistical reporters' reliability information. The program is implemented in GAMS and retains many desirable theoretical and empirical properties. Estimates are used for generating trade flows and markups for Hong Kong's re-exports used in the forthcoming version 7 GTAP Data Base. The model's flexibility has potential for expanded use in other regions where re-exports and associated markup cause discrepant trade flows.

Date: 2007
New Economics Papers: this item is included in nep-cna, nep-dev, nep-int and nep-sea
Note: GTAP Technical Paper No. 27
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