Data and Code for: The Intensive Margin in Trade: How Big and How Important?

Principal Investigator(s): View help for Principal Investigator(s) Ana M. Fernandes, World Bank; Peter J. Klenow, Stanford University; Sergii Meleshchuk, International Monetary Fund; Martha Denisse Pierola, World Bank; Andrés Rodriguez-Clare, University of California-Berkeley

Version: View help for Version V1

Name	File Type	Size	Last Modified
FKMRP package ICPSR			12/11/2023 09:02:AM
LICENSE.txt	text/plain	15.2 KB	04/20/2022 06:41:AM
README.pdf	application/pdf	46.2 KB	12/11/2023 03:05:AM

Project Citation:

Fernandes, Ana M., Klenow, Peter J., Meleshchuk, Sergii, Pierola, Martha Denisse, and Rodriguez-Clare, Andrés. Data and Code for: The Intensive Margin in Trade: How Big and How Important? Nashville, TN: American Economic Association [publisher], 2023. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2023-12-11. https://doi.org/10.3886/E168221V1

Project Description

Summary:

In the benchmark trade models with monopolistic competition featuring a constant trade elasticity, variation in bilateral trade flows happens either entirely on the intensive margin of exports per exporting firm (Krugman) or entirely on the extensive margin of the number of exporting firms (Melitz-Pareto). Using the World Bank's Exporter Dynamics Database featuring firm-level exports from 50 countries, we find that around 50% of variation in exports is along each margin, implying that the trade elasticity may not be constant, and gains from trade may differ from those in benchmark models. We show that moving from a Pareto to a lognormal distribution gives a positive role for both margins, and we use likelihood methods to estimate a generalized Melitz model with a joint lognormal distribution for firm productivity, fixed costs, and demand shifters. Using "exact hat algebra'' we quantify how trade costs affect trade flows and welfare in the estimated model. We find similar welfare effects to those in the Melitz-Pareto model but significant differences in the implied trade flows.

Funding Sources: World Bank’s Multidonor Trust Fund for Trade and Development; Strategic Research Program on Economic Development; Stanford Institute for Economic Policy Research

Scope of Project

Subject Terms: international trade

JEL Classification:
F10 Trade: General
F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

Methodology

Data Source: World Bank’s Exporter Dynamics Database.

Related Publications

Download this project

Published Versions

V1 [2023-12-11]

Export Metadata

Dublin Core

DDI 2.5

Report a Problem

Found a serious problem with the data, such as disclosure risk or copyrighted content? Let us know.

This material is distributed exactly as it arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.