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＜departmental bulletin paper＞
THE EXTENSIVE AND INTENSIVE MARGINS: THE CASE OF MEXICAN FIRMS
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| Abstract | This paper uses data on Mexican manufacturing exports to investigate the number of exporting firms (extensive margins) and the average export sales (the intensive margin) effects across different pair...s of regions from the period 2007-2020. The econometric technique used for this paper is a gravity model to explain the components of trade in the intensive and extensive margins. It shows that the gravity equation fits well across the sample. We introduce a range of regional dummies, market proxies such as population, and trade costs to analyze the impacts on the two margins. Results demonstrate that distance negatively affects both margins, but the influence is noticeably more considerable in the extensive margins. Similar results were found in the GDP coefficients. Regional dummies present mixed results in the two margins; population correlates the more with the extensive margins. Trade costs are negatively related to the extensive and intensive margins; however, their influence on Mexican exports is mainly at the intensive margins. Overall, Extensive margins explain the effects on the manufacturing exports of Mexico, which is in line with the Melitz model.show more |
| Table of Contents | １ INTRODUCTION ２ HETEROGENEOUS FIRMS AND ITS APPLICATIONS TO TRADE COST ３ DATA ４ INTENSIVE AND EXTENSIVE MARGINS: GRAVITY MODELS |
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| Created Date | 2023.01.05 |
| Modified Date | 2023.01.05 |