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Journal article
Estimating the effects of non-discriminatory trade policies within structural gravity models
The Canadian journal of economics, v 54(1), pp 376-409
01 Feb 2021
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Abstract
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.
Resume evaluation de l'incidence des politiques commerciales non discriminatoires au sein de modeles de gravite structurels. Dans un modele de gravite empirique theoriquement coherent, nous proposons une methode simple pour identifier les effets des politiques commerciales unilaterales et non discriminatoires sur le commerce bilateral. Plus precisement, nous affirmons que les estimations basees sur des modeles de gravite structurels doivent etre realisees en tenant compte non seulement des donnees relatives aux flux commerciaux internationaux, mais aussi nationaux. L'utilisation de donnees relatives aux ventes domestiques permet d'identifier les effets des politiques commerciales non discriminatoires, par exemple les tarifs douaniers de la nation la plus favorisee (NPF), meme en presence d'effets fixes importateur et exportateur. Notre approche peut etre utilisee pour redresser les estimations relatives a l'elasticite des echanges, un parametre cle des modeles commerciaux quantitatifs. Nous demontrons l'efficacite de nos techniques dans le cadre des tarifs douaniers NPF et des delais d'exportation, facteurs determinants, representatifs et non discriminatoires sur le commerce, a la fois pour l'importateur et l'exportateur. Il possible d'etendre nos methodes pour quantifier les effets de n'importe quelle caracteristique specifique a un pays sur le commerce, ainsi que de n'importe quelle politique non commerciale.
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Details
- Title
- Estimating the effects of non-discriminatory trade policies within structural gravity models
- Creators
- Benedikt Heid - School of Economics University of Adelaide; CESifoMario Larch - Ifo Institute for Economic ResearchYoto V. Yotov - Ifo Institute for Economic Research
- Publication Details
- The Canadian journal of economics, v 54(1), pp 376-409
- Publisher
- Wiley
- Number of pages
- 34
- Grant note
- DP190103524 / Australian Research Council (ARC); Australian Research Council 592405 / German Research Foundation (DFG)
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000626078900001
- Scopus ID
- 2-s2.0-85104036519
- Other Identifier
- 991019167464104721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Economics