TY - JOUR
T1 - The determinants of bilateral trade
AU - Lai, Huiwen
AU - Zhu, Susan Chun
PY - 2004/5
Y1 - 2004/5
N2 - In this paper we present a monopolistic competition model that incorporates asymmetric trade barriers and international differences in production costs. The model implies a highly non-linear bilateral trade equation. Estimation of this equation yields parameters for the elasticity of substitution and trade costs that are more reasonable than those found in previous studies. A simulation indicates that trade liberalization will shift trade from rich countries to poor countries and from within continental trading partners with preferential trade agreements to intercontinental trading partners. © Canadian Economics Association.
AB - In this paper we present a monopolistic competition model that incorporates asymmetric trade barriers and international differences in production costs. The model implies a highly non-linear bilateral trade equation. Estimation of this equation yields parameters for the elasticity of substitution and trade costs that are more reasonable than those found in previous studies. A simulation indicates that trade liberalization will shift trade from rich countries to poor countries and from within continental trading partners with preferential trade agreements to intercontinental trading partners. © Canadian Economics Association.
UR - http://www.scopus.com/inward/record.url?scp=2542493329&partnerID=8YFLogxK
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-2542493329&origin=recordpage
U2 - 10.1111/j.0008-4085.2004.00011.x
DO - 10.1111/j.0008-4085.2004.00011.x
M3 - RGC 21 - Publication in refereed journal
SN - 0008-4085
VL - 37
SP - 459
EP - 483
JO - Canadian Journal of Economics
JF - Canadian Journal of Economics
IS - 2
ER -
