International trade without CES: Estimating translog gravity

• 成果类型: Article
• 署名作者: Novy, Dennis
• 署名单位: University of Warwick
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2012.08.010
• 发表日期: 2013
• 页码: 271-282
• 关键词: Translog; gravity; Trade costs; distance; Trade cost elasticity; Import share

摘要

This paper derives a micro-founded gravity equation based on a translog demand system that allows for flexible substitution patterns across goods. In contrast to the standard CES-based gravity equation, translog gravity generates an endogenous trade cost elasticity. Trade is more sensitive to trade costs if the exporting country only provides a small share of the destination country's imports. As a result, trade costs have a heterogeneous impact across country pairs, with some trade flows predicted to be zero. I test the translog gravity equation and find empirical evidence that is in many ways consistent with its predictions. (C) 2012 Elsevier B.V. All rights reserved.