Title

Structural gravity equations with intensive and extensive margins

Document Type

Journal article

Source Publication

Canadian Journal of Economics

Publication Date

1-2010

Volume

43

Issue

1

First Page

41

Last Page

62

Publisher

Wiley-Blackwell Publishing, Inc.

Abstract

Recent trade models with heterogeneous firms have changed the interpretation of gravity equations. Chaney (2008) shows that the effect of distance on the number of exporters and average exports depends on key parameters characterizing the elements of market structure. We use firm-level export data to estimate the structural parameters of Chaney's model. Controlling for the fixed costs of exporting, our estimated parameters match, for 28 out of 34 industries, the model's theoretical predictions. Our industry parameters allow us to evaluate separately the effect of transport costs and tariffs on trade, without having to resort to detailed data on trade frictions.

DOI

10.1111/j.1540-5982.2009.01563.x

Print ISSN

00084085

E-ISSN

15405982

Funding Information

Financial support from the ACI - Dynamiques de concentration des activités économiques dans l'espace mondial.

Publisher Statement

Copyright © Canadian Economics Association

Access to external full text or publisher's version may require subscription.

Additional Information

This article also published as Crozet, M., & Koenig, P. (2008). Structural gravity equations with intensive and extensive margins. CEPII Working Paper, (2008-30). France: CEPII. Retrieved from http://www.cepii.fr/PDF_PUB/wp/2008/wp2008-30.pdf

Full-text Version

Publisher’s Version

Recommended Citation

Crozet, M., & Koenig, P. (2010). Structural gravity equations with intensive and extensive margins. Canadian Journal of Economics, 43(1), 41-62. doi: 10.1111/j.1540-5982.2009.01563.x