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GTAP Resources: Resource Display

GTAP Resource #2708

"Applying the gravity approach to sector trade: Who bears the trade costs?"
by Cheptea, Angela, Alex Gohin and Marilyne Huchet Bourdon


Abstract
Thanks to its empirical success, the gravity approach is widely used to explain trade patterns between countries. In this article we question the simple application of this approach to product/sector-level trade on two grounds. First, we demonstrate that the traditional Armington version of gravity must be altered to properly account for the fact that sector expenditures are not strictly equal to sector productions because some trade costs are incurred outside the sector of interest. Secondly, we show empirically that collecting/using good data on sector-level trade and expenditure is extremely crucial for the quality of econometric estimations. Above all one should strictly adhere to the requirements of the theoretical frameworks in order to obtain unbiased and accurate estimates of the different parameters.


Resource Details (Export Citation) GTAP Keywords
Category: 2008 Conference Paper
Status: Published
By/In: Presented at the 11th Annual Conference on Global Economic Analysis, Helsinki, Finland
Date: 2008
Version:
Created: Gohin, A. (4/15/2008)
Updated: Gohin, A. (4/15/2008)
Visits: 1,863
No keywords have been specified.


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