Exploring the Intensive and Extensive Margins of World Trade

Abstract

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Does Firms’ Innovation Promote Export Growth Sustainably?—Evidence from Chinese Manufacturing Firms

“…Besedeš et al [35] claimed that developing countries had greater instability in terms of extensive margin. The consistent findings of Felbermayr et al [32], Helpman et al [34] and Besedeš et al [35] revealed that the majority of the growth in trade was due to the intensive margin rather than the extensive margin. Focusing on Chinese industrial enterprises, Chen [36] argued that innovation played a positive role in promoting extensive and intensive export margins at a macro level.…”

“…Hummels et al [31] took the lead in investigating the decomposition of export growth through product categories, revealing that larger economies export a wider set of goods (extensive margin) and richer countries export high quantities (intensive margin) at modestly higher prices. Felbermayr et al [32] proposed a gravity model to explore the export growth on both margins, in which the results showed that technological improvements in transport and communication as well as GATT or WTO membership can be explained for "distance puzzle", partially in line with the results drawn by Dutt et al [33]. Helpman et al [34] explored the impact of trade frictions on trade flows, where the extensive margin refers to the trade volume per exporter and the intensive margin refers to the number of exporters.…”

Reconstructing the world trade multiplex: The role of intensive and extensive biases

“…Our work complements the existing economic literature about the so-called extensive and intensive margins of trade [47][48][49], defined as the preference for the network to evolve by establishing new connections or by strengthening the intensity of existing ones respectively. While extensive and intensive margins are traditionally defined at an intrinsically dynamical level, we define the new concept of extensive and intensive biases as a purely static notion and for each pair of countries separately.…”

Does Experience Facilitate Entry into New Export Destinations?

“…For instance, using a dataset of Slovenian manufacturing firms, Damijan et al (2011) examine the differences in how new and incumbent exporters evolve. They find that, due to the "aggregate cost of exporting" and the "aggregate uncertainty," 10 new exporters expand into new markets very gradually and do not adjust instantaneously in the second year of exporting; on average, incumbent exporters export to up to five times 8 In addition to the development of transportation systems and information and communications technology, the existence of multilateral resistance could also reduce the impacts of transport costs; that is, bilateral trade not only depends on the distance between the two countries, but also on how isolated they are from other countries (Anderson and van Wincoop, 2003;Brun et al, 2005;Felbermayr and Kohler, 2006). 9 This explanation is in the same vein as that in Tomz et al (2007), who argue that many countries are mistakenly classified as nonparticipants of the General Agreement on Tariffs and Trade (GATT) even though they have similar rights and obligations as GATT members.…”