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Gravity, trade integration, and heterogeneity across industries

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Chen, Natalie and Novy, Dennis. (2011) Gravity, trade integration, and heterogeneity across industries. Journal of International Economics, Vol.85 (No.2). pp. 206-221. ISSN 0022-1996

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Abstract

We derive a micro-founded measure of bilateral trade integration that is consistent with a broad range of leading gravity models. This measure accounts for cross-industry heterogeneity by incorporating substitution elasticities estimated at the industry level. We then use it to provide a theory-based ranking of trade integration across manufacturing industries in European Union countries. In addition, we explore the determinants of trade integration, finding that substantial Technical Barriers to Trade in certain industries as well as high transportation costs associated with heavy-weight goods are the most notable trade barriers.

Item Type: Journal Article
Divisions: Faculty of Social Sciences > Economics
Journal or Publication Title: Journal of International Economics
Publisher: Elsevier BV
ISSN: 0022-1996
Date: 2011
Volume: Vol.85
Number: No.2
Page Range: pp. 206-221
Identification Number: 10.1016/j.jinteco.2011.07.005
Status: Peer Reviewed
Publication Status: Published
Access rights to Published version: Restricted or Subscription Access
Version or Related Resource: An earlier version appears as a working paper in WRAP (http://wrap.warwick.ac.uk/44613/)
Related URLs:
URI: http://wrap.warwick.ac.uk/id/eprint/42286

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