Trade Liberalisation and Import Margins

Arbeitspapier

Trade policy has well documented effects on trade volumes. Reaching beyond volumes, I explore the impact of European emerging economies' recent institutional trade liberalisation on extensive (i.e., the set of imported goods) versus intensive import margins (volumes per imported good) with highly disaggregated data. Differentiating goods categories by use, I find robust evidence of stronger extensive import margin effects of liberalisation for intermediate and capital goods compared to consumer goods. This identifies an important channel for the link between reforms and growth in transition. The results also support new models of heterogeneous firms and trade, which predict that extensive import margin effects of a country's institutional trade liberalisation should - via lowering fixed costs for rest of the world exporters - increase with decreasing substitutability among products.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: FIW Working Paper ; No. 39

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Empirical Studies of Trade ; Technological Change: Choices and Consequences; Diffusion Processes
• Subject: Gravity ; Product Variety ; Trade Liberalisation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Frensch, Richard
• Event: Veröffentlichung
• (who): FIW - Research Centre International Economics
• (where): Vienna
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/121036