Gravity chains: Estimating bilateral trade flows when parts and components trade is important

• Autorzy: Richard Baldwin , Daria Taglioni
• Języki publikacji: EN

Abstrakty

EN

Trade is measured on a gross sales basis while GDP is measured on a net sales basis, i.e. value added. The rapid internationalisation of production in the last two decades has meant that gross trade flows are increasingly unrepresentative of the value-added flows. This fact has important implications for the estimation of the gravity equation. We present empirical evidence that the standard gravity equation performs poorly by some measures when it is applied to bilateral flows where the parts and components trade is important. We also provide a simple theoretical foundation for a modified gravity equation that is suited to explaining trade where international supply chains are important. (original abstract)

Słowa kluczowe

EN

Value chain; Bilateral trade; Econometric models

PL

Łańcuch wartości; Bilateralna wymiana handlowa; Modele ekonometryczne

• Czasopismo: Journal of Banking and Financial Economics
• Rocznik: 2014
• Numer: nr 2(2)
• Strony: 61--82

Twórcy

autor

Richard Baldwin

• Graduate Institute of International Studies, Genewa, Szwajcaria.

autor

Daria Taglioni

• The World Bank

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