Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87043
Authors: 
den Butter, Frank A.G.
Hayat, Raphie
Year of Publication: 
2008
Series/Report no.: 
Tinbergen Institute Discussion Paper 08-016/3
Abstract: 
During the last decades, the growth of trade between China and the Netherlands has been larger than the increase in bilateral trade flows between China and most other countries. Using a time series based gravity model, this paper investigates the main determinants of this increase. The empirical analysis indicates that, apart from GDP growth, Dutch in-house offshoring to China is a major determinant of Dutch import growth from China. Dutch firms tend to offshore production in-house when the asset specificity of the traded inputs is high and offshore via the market when this asset specificity is low. Controlling for these product types also reveals that transport costs are more important for trade in homogeneous and reference priced goods than for trade in differentiated goods
Subjects: 
international trade
transaction costs
offshoring
foreign direct investments
asset specificity
gravity model
JEL: 
F14
L16
L23
Document Type: 
Working Paper

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