Working Paper: NBER ID: w28277
Authors: James E. Anderson; Yoto V. Yotov
Abstract: We propose a short-run model of the extensive margin of trade and deploy it to distinguish and quantify domestic and cross-border margins. Our empirical focus is on the domestic extensive margin of trade (domestic distribution of a product) and its importance for quantifying policy and globalization effects on the international extensive margin of trade. We build a dataset that combines data on the domestic extensive margin and the standard international extensive margin. It reveals significant and intuitive variation in the domestic extensive margin across countries and over time. We quantify the extensive margin effects of European Union (EU) integration, 2008-2018, and demonstrate that these effects cannot be identified without the domestic extensive margin. We find strong and highly heterogeneous effects, both across countries and directionally.
Keywords: No keywords provided
JEL Codes: F13; F14; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Domestic extensive margin (J49) | Identification of effects of non-discriminatory export support policies (F14) |
| Domestic extensive margin (J49) | Identification of effects of import protection policies (F14) |
| Domestic extensive margin (J49) | Identification of effects of country-specific characteristics (O57) |
| Domestic extensive margin (J49) | Identification of effects of exchange rates (F31) |
| Domestic extensive margin (J49) | Identification of effects of globalization impacts on trade margins (F69) |
| Domestic extensive margin (J49) | Identification of effects of EU integration on trade (F15) |
| Globalization (F60) | International extensive margin of trade (F14) |
| EU integration (F15) | Extensive margin gains (F12) |