Structural Gravity Equations with Intensive and Extensive Margins

@article{Crozet2010StructuralGE,
  title={Structural Gravity Equations with Intensive and Extensive Margins},
  author={M. Crozet and Pamina Koenig},
  journal={Wiley-Blackwell: Canadian Journal of Economics},
  year={2010}
}
Recent trade models with heterogeneous firms have changed the interpretation of gravity equations. Chaney (2008) shows that the effect of distance on the number of exporters and average exports depends on key parameters characterizing the elements of market structure. We use firm-level export data to estimate the structural parameters of Chaney's model. Controlling for the fixed costs of exporting, our estimated parameters match, for 28 out of 34 industries, the model's theoretical predictions… Expand
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