Business Intelligence

How Important Is The New Goods Margin In International Trade?

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Executive Summary

The authors propose a methodology for studying changes in bilateral trade due to countries exporting goods that they did not export previously, or exported only in small quantities. Applying this methodology to countries pairs that undergo trade liberalization and to pairs where one of the countries undergoes significant structural transformation, they find large increases on this extensive - or new goods - margin. Looking at country pairs with no major trade policy change or structural change, however, they find little or no increases on the extensive margin.

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