Estimating the extensive margin of trade

Silva, João Santos; Tenreyro, Silvana; Wei, Kehai

doi:10.1016/j.jinteco.2013.12.001

Cited by 52 publications

(25 citation statements)

References 27 publications

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“…As recently highlighted by Santos Silva et al , the number of exported products used as dependent variable, can give rise to specific problems. First the number of products being exported is a count variable, and therefore bounded below by zero.…”

Section: Empirical Model and Econometric Issuesmentioning

confidence: 99%

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The impact of EU trade preferences on the extensive and intensive margins of agricultural and food products

Scoppola

Raimondi

Olper

2018

Agricultural Economics

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In this article, we study the trade creation effects of EU preferential trade agreements (PTAs) in the agriculture and food sectors for a large sample of developing countries in the period 1990-2006. We investigate the extent to which the PTAs affect trade through the extensive margin-number of exported products-or the intensive margin-volume of existing products. We use a gravity framework in a panel data setting, and different estimators to deal with the issues of zero trade flows and the presence of an upper bound in the dependent variable. The results show that EU PTAs positively affect the extensive margin in agricultural trade, but not in processed foods. As regards the intensive margin, the effect is driven by the role of tariffs alone, whereas the other provisions of PTAs do not exert any other significant impact on agricultural or food products. JEL classifications: F13, Q17, F14

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Section: Empirical Model and Econometric Issuesmentioning

confidence: 99%

“…Second, we use different estimators for our gravity model of the extensive margin. Besides the standard Poisson pseudo maximum likelihood (PPML), we also use the flexible estimator recently proposed by Santos Silva et al (). Indeed, as recently shown by these authors, the number of exported products has both a lower and an upper bound.…”

Section: Introductionmentioning

confidence: 99%

The impact of EU trade preferences on the extensive and intensive margins of agricultural and food products

Scoppola

Raimondi

Olper

2018

Agricultural Economics

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“…Feenstra () performs estimations based on country fixed effects (FE) and finds that controlling for country FE gives consistent estimates, taking into account the MR terms. Therefore, in the trade literature, from the birth of the structural gravity model with the MRs, there is a tendency to estimate the model with country FE and pair variables and exclude all country‐specific variables (Anderson, Vesselovsky, & Yotov, ; Fally, ; Helpman et al, ; Santos Silva, Tenreyro, & Wei, ). The main estimation equation in these studies is of the form:

T r a d e_{italicij} = β_{1} i - d u m m y + β_{2} j - d u m m y + β_{3} X_{italicij} + ε_{italicij},

…”

Section: Discussion On the Multilateral Resistance Termsmentioning

confidence: 99%

“…Feenstra (2004) performs estimations based on country fixed effects (FE) and finds that controlling for country FE gives consistent estimates, taking into account the MR terms. Therefore, in the trade literature, from the birth of the structural gravity (Anderson, Vesselovsky, & Yotov, 2016;Fally, 2015;Helpman et al, 2008;Santos Silva, Tenreyro, & Wei, 2014). The main estimation equation in these studies is of the form:…”

Section: Resistance Termsmentioning

confidence: 99%

A global analysis of factors impacting the intensive and extensive margins of bilateral foreign direct investment

Nguyen

2019

World Economy

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This study investigates determinants of bilateral foreign direct investment (FDI) on both margins, the extensive margin (whether to invest) and the intensive margin (how much to invest), based on the recent structural gravity model for FDI developed by Anderson et al. (Trade and investment in the global economy. National Bureau of Economic Research, Cambridge, MA, 2017). I examine a global data set comprised of 110 countries over 9 years, 2004–12. Apart from conventional gravity variables, the source country's technology capital shows a significant and positive impact on both FDI margins. Bilateral investment treaties play a significant role only in determining the extensive margin. Results on FDI stocks and FDI flows can lead to different conclusions; thus, research should consult both types of data series to find which variables have robust effects. Furthermore, breaking down the sample by country development levels reveals that FDI from less‐developed countries (LDCs) is not affected by many common variables, and thus, there is a need to develop more theories and empirical work to investigate the FDI from LDCs in particular.

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“…As shown by Santos Silva et al. (), ignoring the upper bound can give misleading results. They suggest using a flexible pseudo‐maximum likelihood estimator to get more reliable results.…”

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confidence: 98%

Export Performance and Access to Intermediate Inputs: The Case of Rules of Origin Liberalisation

Andersson

2015

World Economy

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Internationally fragmented production processes have highlighted the need of efficient sourcing from foreign suppliers. This paper aims to investigate how exports of final goods are affected by better access to foreign intermediate inputs. In particular, the paper empirically tests whether expanding the set of available intermediate input suppliers through preferential rules of origin liberalisation affects exports of final goods. We exploit the introduction of the southern Mediterranean countries into the Pan‐Euro‐Med zone of diagonal cumulation which meant that foreign intermediate inputs could be used from more countries than before without jeopardising the preferential access to the EU. Using a fixed effects specification that controls for detailed levels of unobserved heterogeneity and multilateral resistance, we examine the effect of the new diagonal cumulation possibilities on southern Mediterranean exports to EU‐15. We find a positive effect on both export intensity, the value of exports, and export diversification, the number of exported products. Being part of the Pan‐Euro‐Med zone of diagonal cumulation is associated with a 20 per cent increase in export intensity and a 5 per cent increase in export diversification.

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Estimating the extensive margin of trade

Cited by 52 publications

References 27 publications

The impact of EU trade preferences on the extensive and intensive margins of agricultural and food products

The impact of EU trade preferences on the extensive and intensive margins of agricultural and food products

A global analysis of factors impacting the intensive and extensive margins of bilateral foreign direct investment

Export Performance and Access to Intermediate Inputs: The Case of Rules of Origin Liberalisation

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