Three essays on trade gravity model

MOspace/Manakin Repository

Breadcrumbs Navigation

Three essays on trade gravity model

Please use this identifier to cite or link to this item: http://hdl.handle.net/10355/6156

[+] show full item record


Title: Three essays on trade gravity model
Author: Wu, Wei, 1977-
Date: 2009
Publisher: University of Missouri--Columbia
Abstract: In chapter 1, the gravity models are revisited, for both the "old" one with which McCallum (1995) finds the famous "border puzzle," and the "new" one introduced by Anderson and van Wincoop (2003). We examine the role of multilateral resistance and its relationship with the actual price index. We also extend the AvW gravity model to have non-tradable goods integrated. Then we use data simulations to test the performances of the gravity models. In chapter 2, we revisit the question of how to measure the effect of language on international trade. More specifically, we present new data and suggest a corresponding estimation technique that gauges by how much language matching facilitates trade between two countries after their distance and incomes are controlled for. We find that the average language depression ratio is 0.31, which is large and economically significant. In chapter 3, we try to indentify the mechanisms through which ethnic networks facilitate international trade. We create an entirely new data set that extends the data from Rauch and Trindade (2002) on ethnic Chinese networks to a panel of about 40 years. We find that Chinese networks have a generally strong and robust influence on trade. We find weak evidence that language and networks are substitutes. In stark contrast to the previous literature, we find strong evidence that networks are complements to institutions, rather than substitutes in overcoming international transaction costs.
URI: http://hdl.handle.net/10355/6156
Other Identifiers: WuW-050509-D1159

This item appears in the following Collection(s)

[+] show full item record