Arbeitspapier
Exports and Capacity Constraints: Evidence for Several Euro Area Countries
We argue that, under certain conditions, firms consider exports as a substitute for domestic demand. Our econometric model for six euro area countries suggests domestic demand and capacity constraints as additional variables for export equations. We apply the exponential and logistic variant of a smooth transition regression model and find that domestic demand developments are relevant for short-run export dynamics particularly during more extreme stages of the business cycle. A substitutive relationship between domestic and foreign sales can most clearly be found for Spain, Portugal and Italy, providing evidence of the importance of sunk costs and hysteresis in international trade.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 5455
- Classification
-
Wirtschaft
Empirical Studies of Trade
Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
Econometric Modeling: General
Model Construction and Estimation
Trade: General
- Subject
-
domestic demand pressure
error-correction models
hysteresis
modelling techniques
smooth transition models
exports
sunk costs
- Event
-
Geistige Schöpfung
- (who)
-
Belke, Ansgar
Oeking, Anne
Setzer, Ralph
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2015
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Belke, Ansgar
- Oeking, Anne
- Setzer, Ralph
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2015
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