Replication data for: Can Multistage Production Explain the Home Bias in Trade?
Principal Investigator(s): View help for Principal Investigator(s) Kei-Mu Yi
Version: View help for Version V1
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LICENSE.txt | text/plain | 14.6 KB | 08/01/2019 05:30:AM |
Project Citation:
Project Description
Summary:
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A large empirical literature finds that there is too little international trade
and too much intranational trade to be rationalized by observed international
trade costs, such as tariffs and transport costs. This paper investigates whether
a model in which the nature of production can change in response to trade
costs -- a framework with multistage production -- can better explain the home
bias in trade. The calibrated model can explain about two-fifths of the Canada
border effect, about two-and-one-half times that of a model with one production
stage. The model also explains a significant fraction of Canada-US \"back-and-
forth,\" or vertical specialization, trade. (JEL F11, F13, F14)
Scope of Project
JEL Classification:
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F14 Empirical Studies of Trade
F13 Trade Policy • International Trade Organizations
F11 Neoclassical Models of Trade
F14 Empirical Studies of Trade
F13 Trade Policy • International Trade Organizations
F11 Neoclassical Models of Trade
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