Working Paper: CEPR ID: DP7156
Authors: Andrew B. Bernard; J. Bradford Jensen; Stephen J. Redding; Peter K. Schott
Abstract: Recent research in international trade emphasizes the importance of firms' extensive margins for understanding overall patterns of trade as well as how firms respond to specific events such as trade liberalization. In this paper, we use detailed U.S. trade statistics to provide a broad overview of how the margins of trade contribute to variation in U.S. imports and exports across trading partners, types of trade (i.e., arm's-length versus related-party) and both short and long time horizons. Among other results, we highlight the differential behavior of related-party and arm's-length trade in response to the 1997 Asian financial crisis.
Keywords: heterogeneous firms; product differentiation; product market entry and exit
JEL Codes: F1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| extensive margins (F12) | variation in US imports and exports (F10) |
| intensive margin (C24) | variation in overall US exports (F10) |
| intensive margins (F12) | variation in overall US imports (F14) |
| 1997 Asian financial crisis (F65) | related-party trade response (F10) |
| related-party trade (L14) | arms-length trade response during crisis (F16) |
| intensive margin (C24) | export declines during crisis (F44) |
| intensive margin (C24) | import increases during crisis (F44) |