Title: Structural Estimation of Variety Gains from Trade Integration in Asia
Citation: AUSTRALIAN ECONOMIC REVIEW vol. 43 no. 3 p. 270-288
Publication Year: 2010
JRC N°: JRC60526
ISSN: 0004-9018
URI: http://www.ingentaconnect.com/content/bpl/aere/2010/00000043/00000003/art00004
DOI: 10.1111/j.1467-8462.2010.00606.x
Type: Articles in periodicals and books
Abstract: This article studies the variety gains of trade integration in Asia. Adopting a heterogeneous firm model of trade of monopolistic competition allowed us to estimate not only the welfare gains because of country specialisation, but also the variety gains arising from trade integration. The underlying structural parameters were estimated econometrically, based on a large panel of firm-level data for the Asian economies (ORIANA). Our empirical findings suggest that, when relaxing the assumption of firm homogeneity and accounting for export market entry costs, the gains from trade integration are higher than in conventional models with representative firms.
JRC Directorate:Growth and Innovation

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