Estimating the effects of non‐discriminatory trade policies within structural gravity models

Artikel

We propose a simple method to identify the effects of unilateral and non-discriminatory trade policies on bilateral trade within a theoretically consistent empirical gravity model. Specifically, we argue that structural gravity estimations should be performed with data that include not only international trade flows but also intra-national trade flows. The use of intra-national sales allows identification of the effects of non-discriminatory trade policies such as most favoured nation tariffs, even in the presence of exporter and importer fixed effects. A byproduct of our approach is that it can be used to recover estimates of the trade elasticity, a key parameter for quantitative trade models. We demonstrate the effectiveness of our techniques in the case of most favoured nation tariffs and “time to export” as representative non-discriminatory determinants of trade on the importer and on the exporter side, respectively. Our methods can be extended to quantify the impact on trade of any country-specific characteristics as well as any non-trade policies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Canadian Journal of Economics/Revue canadienne d'économique ; ISSN: 1540-5982 ; Volume: 54 ; Year: 2021 ; Issue: 1 ; Pages: 376-409 ; Hoboken, NJ: Wiley

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Heid, Benedikt ; Larch, Mario ; Yotov, Yoto V.
• Event: Veröffentlichung
• (who): Wiley
• (where): Hoboken, NJ
• (when): 2021

Further information

• DOI: doi:10.1111/caje.12493
• Handle: http://hdl.handle.net/10419/240940
• Last update: 10.03.2025, 11:44 AM CET