Determinants of Bilateral Trade
Determinants of Bilateral Trade

Author: Alan V. Deardorff

Publisher:

Published: 1995

Total Pages: 40

ISBN-13:

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This paper derives bilateral trade from two cases of the Heckscher-Ohlin Model, both also representing a variety of other models as well. First is frictionless trade, in which the absence of all impediments to trade in homogeneous products causes producers and consumers to be indifferent among trading partners. Resolving this indifference randomly, expected trade flows correspond exactly to the simple frictionless gravity equation if preferences are identical and homothetic, or if demands are uncorrelated with supplies, and they depart from the gravity equation systematically when there are such correlations. In the second case, countries produce distinct goods, as in the H-O Model with complete specialization or a variety of other models, and preferences are either Cobb-Douglas or CES. Here trade tends to the standard gravity equation with trade declining in distance, with departures from it that depend on relative transport costs. Conclusions are, first, that even a simple gravity equation can be derived from standard trade theories, and second, that because the gravity equation characterizes many models, its use to test any of them is suspect.

Comparative Advantage, Growth, and the Gains from Trade and Globalization
Comparative Advantage, Growth, and the Gains from Trade and Globalization

Author: Robert M. Stern

Publisher: World Scientific

Published: 2011

Total Pages: 716

ISBN-13: 9814340375

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Alan Deardorff was 65 years old on June 6, 2009. To celebrate this occasion, a Festschrift in his honor was held on October 2OCo3, 2009, in the Rackham Amphitheater at the University of Michigan in Ann Arbor. The Festschrift was entitled OC Comparative Advantage, Economic Growth, and the Gains from Trade and Globalization: A Festschrift in Honor of Alan V Deardorff.OCO It was co-organized by two of Professor Deardorff''s former students, Drusilla Brown of Tufts University and Robert Staiger of Stanford University, together with Robert Stern representing the University of Michigan. The first day of the Festschrift involved a series of panels in which invited participants reflected on Professor Deardorff''s contributions, including his writings on: comparative advantage; trade and growth; the gains from trade and globalization; and computational modeling and trade policy analysis. The panel participants prepared written comments, setting out their evaluation of Professor Deardorff''s contributions combined with their own thoughts on the current state of knowledge and analysis of the particular topic. At the end of the first day, Paul Krugman of Princeton University and The New York Times delivered a Citigroup Foundation Special Lecture entitled OC Reflections on Globalization: Yesteryear and Today.OCO All of these papers and Krugman''s lecture are contained in the volume."

Determinants of Bilateral Trade Flows
Determinants of Bilateral Trade Flows

Author: Patrick Steiner

Publisher:

Published: 2015

Total Pages:

ISBN-13:

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This thesis aims to shed light on the determinants of bilateral trade flows across countries. Following the ideas of Linder, a demand-side approach is being taken next to the prevailing trade theories analysing trade from a supply-side perspective. Recent theoretical works predict patterns of trade in which southern countries export mostly to northern countries and northern countries to a broader set of countries. Patterns of trade will be empirically explored incorporating income differences across countries and their income distribution as determinants. Trade will be split into an intensive and an extensive margin where the focus will be on the latter. Single bilateral trade flows will be aggregated to sectors to tackle sector-specific characteristics. Not only the percentage of markets, but also the percentage of products traded bilaterally will be investigated using stylised facts and Bernoulli quasi- likelihood estimation. Variables for income differences and distributions will be GDP per capita and Gini coefficients respectively. The empirical analysis reveals that GDP p.c. has a significant impact on both the percentage of markets and the percentage of traded products. The effect of inequality is ambiguous with no clear-cut results. The sectoral analysis proofs to be crucial to analyse trade.

Determinants of Bilateral Trade
Determinants of Bilateral Trade

Author: Dong Phong Nguyen

Publisher:

Published: 2017

Total Pages: 0

ISBN-13:

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In this research, we investigate the determinants of international trade, employing a dataset of bilateral trade and economics characteristics in the ASEAN+3 countries. We include a large number of independent variables that potentially drive international trade. We also use various standard gravity model variables to maintain consistency with the current literature. The results provide some important insights into the determinants of bilateral trade and offer policy implications regarding the promotion of international trade for governments worldwide. In particular, we find that output asymmetry between countries positively explains bilateral trade. Moreover, the findings suggest that making use of comparative advantage by differentiating the export product structure is important in promoting international trade. We do not find a consistent impact from bilateral exchange rate volatility on bilateral trade. This result points to the importance of providing opportunities for the hedging of currency uncertainty to avoid its adverse effects on trade. The results for other standard gravity model variables are consistent with the results of previous theoretical and empirical research.