Variety Gains and the Extensive Margin of Trade

Mohler, Lukas. (2014) Variety Gains and the Extensive Margin of Trade. International economic journal, 28 (4). pp. 543-558.

Full text not available from this repository.

Official URL: http://edoc.unibas.ch/44163/

Downloads: Statistics Overview


Findings from the literature suggest that previous estimates of the variety gains from trade are too small because of the imprecise measurement of the imported variety set under the Armington assumption. In this contribution, the lambda ratios as presented in Feenstra ( 1994 Feenstra, R. C. ( 1994 ). New product varieties and the measurement of international prices . American Economic Review , 84(1), 157 – 177 . ) are first modified by assuming that all import variations are due to extensive margin adjustments. Under this extreme assumption, variety gains increase by a factor of six compared with the baseline Armington product-country variety differentiation case. Second, results from the literature on multi-product firms are used to obtain a more realistic magnitude of the extensive margin of imports by accounting for the entry and exit of firms as well as for product turnover within firms. It is found that welfare gains still increase by a factor of 2.5 compared with the Armington baseline case.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Aussenwirtschaft und Europ. Integration (Weder)
UniBasel Contributors:Mohler, Lukas
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:Korea International Economic Association
Note:Publication type according to Uni Basel Research Database: Journal article
Related URLs:
Identification Number:
Last Modified:16 Dec 2016 09:08
Deposited On:16 Dec 2016 09:08

Repository Staff Only: item control page