Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18914
Authors: 
Felbermayr, Gabriel J.
Kohler, Wilhelm K.
Year of Publication: 
2004
Series/Report no.: 
CESifo Working Paper 1276
Abstract: 
World trade evolves at two margins. Where a bilateral trading relationship already exists it may increase through time (intensive margin). But trade may also increase if a trading bilateral relationship is newly established between countries that have not traded with each other in the past (extensive margin). We provide an empirical dissection of post-World-War- II growth in manufacturing world trade along these two margins. We propose a ?cornersolutions- version? of the gravity model to explain movements on both margins. A Tobit estimation of this model resolves the so-called ?distance-puzzle?. It also finds more convincing evidence than recent literature that WTO-membership enhances trade.
Subjects: 
bilateral trade
globalization
gravity model
JEL: 
F12
F15
Document Type: 
Working Paper

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