Product differentiation and duration of US import trade

Besedeš, Tibor; Prusa, Thomas J.

doi:10.1016/j.jinteco.2005.12.005

Cited by 291 publications

(332 citation statements)

References 25 publications

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“…By replicating an influential study by Besedeš and Prusa (2006b), but employing discretetime models as well as the original Cox model, Hess and Persson (2010) find empirical support for each of the discussed arguments against the Cox model, and conclude that using discrete-time models is a more appropriate choice. Following Hess and Persson (2010), we therefore focus on discrete-time duration models in our empirical analysis.…”

Section: Methodsmentioning

confidence: 86%

“…This theory does not, however, seem to be consistent with very short trade durations (see Besedeš and Prusa, 2006a, for a discussion). The search-cost theory proposed by Rauch and Watson (2003) is another candidate, and it has been shown by Besedeš and Prusa (2006b) and Besedeš (2008) to have some explanatory power. However, the most natural setting for thinking about entry and exit in the export market may be the literature on sunk costs.…”

Section: Other Relevant Researchmentioning

confidence: 99%

“…Using this relatively aggregated 4-digit data has two advantages. As noted by Besedeš and Prusa (2006b), unlike customs product codes, according to which more disaggregated data are usually classified, products in the SITC are not reclassified from year to year, implying that we have one less source of censoring to worry about. Further, data at a relatively high level of aggregation will yield more conservative estimates.…”

Section: Datamentioning

confidence: 99%

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Exploring the duration of EU imports

2011

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The objective of this paper is twofold. First, against the background of an existing empirical literature on the duration of trade which has found that international trade is often of strikingly short duration, we aim to establish whether or not EU imports from the rest of the world also are short-lived. Second, since there is at this point no clear commonly accepted theoretical explanation for these short trade durations, we seek to provide a thorough empirical description and analysis of the phenomenon, with the intention of thereby facilitating theoretical developments on the subject. We employ a rich data set of detailed imports to the EU15 countries from 140 exporters, covering the time period 1962-2006. Using these data, we begin by conducting a thorough descriptive analysis of the duration of EU imports. Thereafter, we perform a regression analysis using discrete-time duration models with proper controls for unobserved heterogeneity. We draw the conclusion that EU imports are indeed very short-lived -in fact, possibly more so than, for example, US imports. The median duration of EU imports is for example merely one year, and almost 60 percent of all spells cease during the first year of service. Among our empirical findings are (i) that the duration of trade remains stable across the long time period that we study; (ii) that short trade durations are the result of at least two processes: countries shifting between different suppliers but continuing to import a given product, and countries ceasing to import the product altogether; and (iii) that countries with a diversified export structure also will tend to have more long-lived export flows. In our formal regression, we are also able to find a set of explanatory variables that have statistically significant effects on the probability that trade flows die. Terms of use: Documents in

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Section: Methodsmentioning

confidence: 86%

Section: Other Relevant Researchmentioning

confidence: 99%

Section: Datamentioning

confidence: 99%

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Exploring the duration of EU imports

2011

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“…This paper offers a new insight to accumulated studies on intra-regional trade and production networks in East Asia. It also contributes to a pioneering work on duration of trade by Besedeš and Prusa (2006a;2006b). Despite an emerging body of literature on trade at the country-product level, the duration of trade has not received much attention until very recently.…”

Section: These Two Features Of the Transactions Of Intermediate Goodsmentioning

confidence: 91%

“…Besedeš and Prusa (2006a), who first investigated the duration of the US imports, find the country-product-level trade to be surprisingly volatile with the median duration of four year. As their companion paper, Besedeš and Prusa (2006b) highlight that differentiated products have a longer median duration and a higher probability of survival than homogeneous products, based on a search cost model of international trade. Besedeš (2008) provides additional facts on the survival of the US imports from a search cost perspective.…”

Section: These Two Features Of the Transactions Of Intermediate Goodsmentioning

confidence: 99%

Stability of production networks in East Asia: Duration and survival of trade

Obashi

2010

Japan and the World Economy

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This paper sheds light on the stability of international production networks in East Asia from the perspective of the duration and survival of bilateral trade relationships at the product-line level. Using highly disaggregated data for intra-East Asian machinery trade, survival analysis is conducted as well as the examinations of the duration and volatility of trade relationships. The product-level analyses reveal that, compared to machinery finished products, machinery parts & components are traded through longer-lived and more stable relationships among East Asian countries. Once transactions are started, trade relationships of machinery parts & components are more likely to be maintained between countries even at a long distance, regardless of the exchange-rate fluctuations. The probability of discontinuing trade relationships of machinery finished products, on the other hand, are more likely to be sensitive to the level of trading cost as well as the exchange-rate fluctuations.

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Salmon trade duration: The application of firm‐level trade transaction data from the Norwegian salmon industry

Jaghdani,

Johansen,

Thakur

et al. 2024

Agribusiness

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Seafood products are mainly provided through trade to international markets and Norway is the major international player for the export of salmon products. It is argued that fresh or chilled salmon, which are perishable products and Norway's main seafood export, need stable trade partners to safely and properly reach consumption markets. In this study, the firm‐to‐firm level trade transactional data for both exporters and importers for the 2005–2018 period was utilized for a trade duration analysis. The Kaplan–Meier survival estimators, Cox proportional hazard model, and frailty model were used to study the stability of trade relations between the partners through survival and hazard models. The study considers the heterogeneous firm trade model along with a theoretical framework. The results show that, on average, the trade duration for the salmon trade between firms is 2.39 years, which is relatively low for a perishable product such as salmon. It shows that the market entry and exit is relatively fast, and that the survival rate between the EU as a major demand market and non‐EU countries is not very different. However, core and periphery markets can be defined by considering the survival rate, as major processing hubs in the EU, such as Poland and France as core markets, have higher survival rates compared with other countries that can be considered peripheries. Both extensive and intensive margins were found to reduce the hazard ratio. Different hazard ratios were also found between different types of exporter or ones utilizing different means of transport. We conclude that the trade duration between the partners can be increased if the competition in the market increases, which is probably possible in markets like the United States where other exporters such as Chile are available.

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Product differentiation and duration of US import trade

Cited by 291 publications

References 25 publications

Exploring the duration of EU imports

Exploring the duration of EU imports

Stability of production networks in East Asia: Duration and survival of trade

Salmon trade duration: The application of firm‐level trade transaction data from the Norwegian salmon industry

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