How Important Is the New Goods Margin in International Trade?

By Timothy J. Kehoe, Kim J. Ruhl. Journal of Political Economy, 2013

324 citations recorded by the source corpus.

We propose a methodology for studying changes in bilateral commodity trade due to goods not exported previously or exported only in small quantities. Using a panel of 1,900 country pairs, we find that increased trade of these “least-traded goods” is an important factor in trade growth. This extensive margin accounts for 10 percent of the growth in trade for NAFTA country pairs, for example, and 26 percent in trade between the United States and Chile, China, and Korea. Looking at country pairs with no major trade policy change or structural change, however, we find little change in the extensive margin.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/b5f19c09b8d8909a728bfa61fb2ad7cd6e797ed1

Citations in the corpus

• Neighbors and the evolution of the comparative advantage of nations: Evidence of international knowledge diffusion? (2014, unknown): “As has been shown, the extensive margin accounts for a significant fraction of the growth of global trade in the last decades (Zahler, 2007; Kehoe and Ruhl, 2013).”
• Export Diversification: What's behind the Hump? (2011, unknown): “Several papers (for example, Evenett & Venables, 2002; Hummels & Klenow, 2005; Kehoe & Ruhl, 2006; Brenton & Newfarmer, 2007) decompose cross-country export variations into intensive and extensive (new-products or new-markets) margins and study the contribution of these margins in export growth.2…”
• On the widely differing effects of free trade agreements: Lessons from twenty years of trade integration (2019, unknown): “hypothesis, the comparison across specifications helps clarify why our earlier results differ starkly from Kehoe & Ruhl (2013) and Kehoe et al. (2015), since these studies each examine changes in trade within individual FTA pairings on a case-by-case basis, which is most similar to our focus on with”
• Trade facilitation and the extensive margin (2013, unknown): “All in the gravity tradition, but using various ways to define and measure trade facilitation and to estimate its results, Wilson, Mann, and Otsuki (2003, 2005), Soloaga, Wilson, and Mejı́a (2006), Djankov, Freund, and Pham (2010), Persson (2008), Lee and Park (2007), Nordås, Pinali, and Geloso Gros”
• Brexit and the macroeconomic impact of trade policy uncertainty (2019, unknown): “, 2012) and that small firms have higher trade elasticites (Kehoe et al., 2015; Kehoe and Ruhl, 2013).”
• The Impacts of Unilateral Climate Policy on Competitiveness: Evidence From Computable General Equilibrium Models (2017, unknown): “There is recent empirical evidence that trade liberalization has at times led to radical changes in the categories of goods traded in ways not recognized in the past (Kehoe and Ruhl 2009).”
• Exporting under trade policy uncertainty: Theory and evidence (2014, unknown): “Lloyd’s (2008) careful construction of a 100 year time series for Australian tariffs shows that some sectors were highly protected as recently as the early 1990s.”
• New Imported Inputs, New Domestic Products (2011, unknown): “See Broda and Weinstein (2006), Kehoe and Ruhl (2009), and Debaere and Mostashari (2010) for additional evidence on how lower trade barriers have boosted the of variation by means of two complementary approaches.”