Gravity with History: on Incumbency Effects in International Trade

• 成果类型: Article
• 署名作者: Egger, Peter; Foellmi, Reto; Schetter, Ulrich; Torun, David
• 署名单位: Swiss Federal Institutes of Technology Domain; ETH Zurich; University of St Gallen; University of Pavia; University of California System; University of California San Diego
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvae052
• 发表日期: 2025
• 页码: 1350-1396
• 关键词: entry-deterrence; export; gains; COSTS; Heterogeneity; penetration; hysteresis; models; IMPACT

摘要

Countries trade more if they liberalized their trade relationship earlier. We derive a gravity equation featuring this path dependence due to sunk market-access costs that generate incumbency effects. We provide supporting evidence for the underlying mechanism and derive an augmented ACR (Arkolakis, Costinot, and Rodr & iacute;guez-Clare 2012) formula for the gains from trade that accounts for incumbency effects. A quantification suggests our mechanism explains up to 25% of countries' home shares, and the gains from trade are, on average, 10% larger when allowing for incumbency effects. The analysis further reveals novel distributional effects of trade, boosting real wages but reducing profits.