Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319639 
Year of Publication: 
2025
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 15/2025
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
We develop and test a theory of efficient international trade. Efficiency gains arise through lower trade costs faced by 'trade specialists', whose superiority over 'common traders' manifests itself through lower trade costs. To test our theory, we construct and deploy a novel dataset based on firm-level merchanting data. Our estimates reveal that, on average, the trade costs for the 'trade specialists' are about four times lower than for non-specialists. The corresponding welfare effects from globally efficient trade amount to a remarkable gain of 80%, on average, which sends an encouraging message for the potential gains from trade that are missing in the existing literature.
Subjects: 
Efficiency
International Trade
Trade Costs
Gains from Trade
JEL: 
D60
D61
F14
F12
F10
ISBN: 
978-3-98848-036-1
Document Type: 
Working Paper

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