Exports and capacity constraints - a smooth transition regression model for six euro area countries

Arbeitspapier

This paper argues that, under certain conditions, firms consider export activity as a substitute of serving domestic demand. Our econometric model for six euro area countries suggests domestic demand pressure and capacity constraint restrictions as additional variables of a properly specified export equation. As an innovation to the literature, we assess the empirical significance through the logistic and the exponential variant of the non-linear smooth transition regression model. We find that domestic demand developments are relevant for the short-run dynamics of exports in particular during more extreme stages of the business cycle. A strong 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.

Angaben zum Objekt

• ISBN: 978-92-899-1148-1
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ECB Working Paper ; No. 1740

Klassifikation und Themen

• Klassifikation: 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
• Thema: domestic demand ; exports ; hysteresis ; smooth transition models ; sunk costs

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Belke, Ansgar ; Oeking, Anne ; Setzer, Ralph
• Ereignis: Veröffentlichung
• (wer): European Central Bank (ECB)
• (wo): Frankfurt a. M.
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/154173
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ