EconPapers    
Economics at your fingertips  
 

Explaining Home Bias in Consumption: The Role of Intermediate Input Trade

Russell Hillberry and David Hummels ()

No 9020, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We show that 'home bias' in trade patterns will arise endogenously due to the co-location decisions of intermediate and final goods producers. Our model identifies four implications of home bias arising out of specialized industrial demands. Regions absorb different bundles of goods. Buyers and sellers of intermediate goods co-locate. Intermediate input trade is highly localized. The effect of spatial frictions on trade are magnified. These implications are examined and confirmed using a unique data source that matches the detailed subnational geography of shipments to the characteristics of the shipping establishments. Our results broaden the measurement and interpretation of home bias, and provide new evidence on the role of intermediate inputs in concentrating production.

JEL-codes: F12 F15 (search for similar items in EconPapers)
Date: 2002-06
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45) Track citations by RSS feed

Published as Hillberry, Russell and David Hummels. “Intra-national Home Bias: Some Explanations." Review of Economics and Statistics 85 (2003): 1089-1092.

Downloads: (external link)
http://www.nber.org/papers/w9020.pdf (application/pdf)

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:nbr:nberwo:9020

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w9020

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-06-20
Handle: RePEc:nbr:nberwo:9020