Distorted trade barriers

Arbeitspapier

Since firm heterogeneity has been introduced into international trade models, the importance of firm entry and exit (the extensive margin) has been highlighted. In fact, Chaney (2008) illustrates how accounting for this extensive margin and heterogenous firms alters the standard gravity equation; thereby reversing the previously predicted effect the elasticity of substitution has on the elasticity of trade flows. Furthermore, Cole (forthcoming) points out that ad valorem tariffs affect the extensive margin quite differently than the commonly used iceberg transport cost. In this paper, I show that the elasticity of trade flows with respect to tariffs is more elastic than that of iceberg transport costs. Thus, elasticity estimates derived from variables such as distance may underestimate the effect caused by a change in tariffs.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: UCD Centre for Economic Research Working Paper Series ; No. WP11/05

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Trade Policy; International Trade Organizations ; Trade: Forecasting and Simulation
• Thema: Intra-industry Trade ; Gravity ; Firm heterogeneity ; Monopolistic competition

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Cole, Matthew T.
• Ereignis: Veröffentlichung
• (wer): University College Dublin, UCD School of Economics
• (wo): Dublin
• (wann): 2011

Weitere Informationen

• Handle: http://hdl.handle.net/10419/72219
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ