Replication data for: Can Multistage Production Explain the Home Bias in Trade?

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Project Citation:

Yi, Kei-Mu. Replication data for: Can Multistage Production Explain the Home Bias in Trade? Nashville, TN: American Economic Association [publisher], 2010. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112330V1

Project Description

Summary: A large empirical literature finds that there is too little international trade and too much intranational trade to be rationalized by observed international trade costs, such as tariffs and transport costs. This paper investigates whether a model in which the nature of production can change in response to trade costs -- a framework with multistage production -- can better explain the home bias in trade. The calibrated model can explain about two-fifths of the Canada border effect, about two-and-one-half times that of a model with one production stage. The model also explains a significant fraction of Canada-US "back-and- forth," or vertical specialization, trade. (JEL F11, F13, F14)

Scope of Project

JEL Classification:
      F11 Neoclassical Models of Trade
      F13 Trade Policy; International Trade Organizations
      F14 Empirical Studies of Trade

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V1 [2019-10-11]

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