TY - GEN
T1 - Unlocking New Methods to Estimate Country-Specific Trade Costs and Trade Elasticities
AU - Freeman, R.
AU - Larch, M.
AU - Theodorakopoulos, A.
AU - Yotov, Y.V.
PY - 2021/11
Y1 - 2021/11
N2 - We propose new methods to identify the full impact of country-specific characteristics on bilateral trade flows within the framework of ‘the new quantitative trade model.’ We complement theory with a simple two-stage estimating procedure, and offer a proof of concept by quantifying the impact of country-specific R&D expenditure on trade. Results suggest a positive relationship overall, but a larger impact on international (versus domestic) trade. Further, our methodology allows us to recover trade elasticity estimates without the need for price/tariff data. Bringing this to the sectoral level, we obtain estimates of the trade elasticity for manufacturing, services, and tradable versus non-tradable sectors
AB - We propose new methods to identify the full impact of country-specific characteristics on bilateral trade flows within the framework of ‘the new quantitative trade model.’ We complement theory with a simple two-stage estimating procedure, and offer a proof of concept by quantifying the impact of country-specific R&D expenditure on trade. Results suggest a positive relationship overall, but a larger impact on international (versus domestic) trade. Further, our methodology allows us to recover trade elasticity estimates without the need for price/tariff data. Bringing this to the sectoral level, we obtain estimates of the trade elasticity for manufacturing, services, and tradable versus non-tradable sectors
UR - http://www.scopus.com/inward/record.url?eid=2-s2.0-85120942771&partnerID=MN8TOARS
M3 - Other contribution
T3 - CESifo Working Papers
ER -