Product Differentiation and Duration of US Import Trade ∗

  title={Product Differentiation and Duration of US Import Trade ∗},
  author={Tibor Besede{\vs} and Thomas J. Prusa},
We examine the extent to which product differentiation affects duration of US import trade relationships. The results are consistent with a matching model of trade formation. Using highly disaggregated product level data we estimate the hazard rate is at least 23 percent higher for homogeneous goods than for differentiated products. The results are not only highly robust but are often strengthened under alternative specifications. As the smallest relationships are dropped, differences across… CONTINUE READING
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