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Trade Facilitation and the Extensive Margin

Persson, Maria LU (2013) In Journal of International Trade and Economic Development 22(5). p.658-693
Abstract
The literature on trade facilitation has mostly focused on implications for trade volumes. However, recent theoretical contributions have emphasized that trade costs – such as transaction costs related to cross-border trade procedures – affect both the traded volumes of “old” goods (the intensive margin) and the range of traded goods (the extensive margin). This paper therefore tests whether trade facilitation affects the extensive margin by counting the number of 8-digit products that are exported from developing to EU countries, and using this as the dependent variable in an estimation. Moreover, it also tests whether the extensive margins in differentiated and homogeneous goods are affected in the same way by transaction costs.... (More)
The literature on trade facilitation has mostly focused on implications for trade volumes. However, recent theoretical contributions have emphasized that trade costs – such as transaction costs related to cross-border trade procedures – affect both the traded volumes of “old” goods (the intensive margin) and the range of traded goods (the extensive margin). This paper therefore tests whether trade facilitation affects the extensive margin by counting the number of 8-digit products that are exported from developing to EU countries, and using this as the dependent variable in an estimation. Moreover, it also tests whether the extensive margins in differentiated and homogeneous goods are affected in the same way by transaction costs. Estimation results suggest that if export transaction costs – proxied by the number of days needed to export a good – declined by 1 per cent, the number of exported differentiated and homogeneous products would rise by 0.6 and 0.3 per cent respectively. Policy simulations further illustrate that if all countries were as efficient at the border as the most efficient country at the same level of development, the number of exported differentiated and homogeneous products would increase by 62 and 26 per cent respectively. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Developing Countries, European Union, Homogeneous Products, Trade Facilitation, Extensive Margin, Export Diversification, Differentiated Products
in
Journal of International Trade and Economic Development
volume
22
issue
5
pages
658 - 693
publisher
Taylor & Francis
external identifiers
  • wos:000321172900002
  • scopus:84865106756
ISSN
1469-9559
DOI
10.1080/09638199.2011.587019
language
English
LU publication?
yes
id
0660da8d-5169-4ceb-a6ee-855190560167 (old id 1979077)
date added to LUP
2016-04-01 10:19:37
date last changed
2022-03-27 07:10:05
@article{0660da8d-5169-4ceb-a6ee-855190560167,
  abstract     = {{The literature on trade facilitation has mostly focused on implications for trade volumes. However, recent theoretical contributions have emphasized that trade costs – such as transaction costs related to cross-border trade procedures – affect both the traded volumes of “old” goods (the intensive margin) and the range of traded goods (the extensive margin). This paper therefore tests whether trade facilitation affects the extensive margin by counting the number of 8-digit products that are exported from developing to EU countries, and using this as the dependent variable in an estimation. Moreover, it also tests whether the extensive margins in differentiated and homogeneous goods are affected in the same way by transaction costs. Estimation results suggest that if export transaction costs – proxied by the number of days needed to export a good – declined by 1 per cent, the number of exported differentiated and homogeneous products would rise by 0.6 and 0.3 per cent respectively. Policy simulations further illustrate that if all countries were as efficient at the border as the most efficient country at the same level of development, the number of exported differentiated and homogeneous products would increase by 62 and 26 per cent respectively.}},
  author       = {{Persson, Maria}},
  issn         = {{1469-9559}},
  keywords     = {{Developing Countries; European Union; Homogeneous Products; Trade Facilitation; Extensive Margin; Export Diversification; Differentiated Products}},
  language     = {{eng}},
  number       = {{5}},
  pages        = {{658--693}},
  publisher    = {{Taylor & Francis}},
  series       = {{Journal of International Trade and Economic Development}},
  title        = {{Trade Facilitation and the Extensive Margin}},
  url          = {{http://dx.doi.org/10.1080/09638199.2011.587019}},
  doi          = {{10.1080/09638199.2011.587019}},
  volume       = {{22}},
  year         = {{2013}},
}