1. Trade Liberalization and Export Variety : A Comparison of Mexico and China
- Author
-
Feenstra, Robert C. and Kee, Hiau Looi
- Subjects
TRADE LIBERALIZATION ,AGGREGATE TRADE ,WEALTH ,AGRICULTURE ,INNOVATION ,FREE TRADE ,VALUATION ,PRODUCTIVITY GROWTH ,CONSUMERS ,REDUCTION IN TARIFFS ,GROWTH MODELS ,PRODUCTION PROCESS ,WORLD TRADE ,WTO ,GDP ,FREE TRADE AREA ,TARIFF BARRIERS ,ELASTICITY OF SUBSTITUTION ,DEMAND SHOCKS ,IMPORT RESTRICTIONS ,MONOPOLISTIC COMPETITION ,CHANGES IN TRADE ,POLITICAL ECONOMY ,EXPORTS ,INCOME ,MACROECONOMICS ,CONSTRUCTION ,PRODUCTIVITY ,INTERNATIONAL TRADE ,TARIFF REDUCTIONS ,TRADE DATA ,TRADE POLICY ,ECONOMIC STATISTICS ,VALUE OF IMPORTS ,AVERAGE TARIFF ,VARIETY ,WELFARE GAINS ,DEVELOPMENT ECONOMICS ,INNOVATIONS ,GROWTH RATE ,COMPETITION EFFECT ,LOW TARIFFS ,INDEX NUMBERS ,GLOBAL ECONOMY ,DEMAND CURVE ,TRADE BARRIERS ,GLOBALIZATION ,AGGREGATE TRADE FLOWS ,APPAREL ,AVERAGE TARIFFS ,TARIFF REDUCTION ,ELECTRONICS INDUSTRY ,LEADING ,TRADE AGREEMENT ,HIGH TARIFFS ,ELASTICITY ,VALUE OF EXPORTS ,IMPERFECT COMPETITION ,PRICE INDEX ,NATURAL RESOURCES ,EXPORT ,TARIFF DATA ,PRODUCTION FUNCTION ,AGGREGATE EXPORTS ,IDEA ,DISCUSSION ,TARIFF SCHEDULE ,PRICE INDEXES ,INTERNATIONAL PRICES - Abstract
The issue of measuring product variety has received relatively little attention due to its inherent difficulty. In the language of index numbers, an expansion in the range of inputs or outputs is a 'new goods' problem: a good that is newly available will have an observed price and quantity, but no corresponding price or quantity the year before. The availability of this new good will yield a welfare gain to consumers, as well as a productivity gain to firms buying the new input. In this paper we show how product variety can be measured in the case of a CES aggregator function. This paper is organized as: after reviewing the literature on the 'new goods' problem in section two, then discuss how to measure export variety in section three. In sections four and five discuss the empirical applications to export variety growth in Mexico and China. Regression results relating trade liberalization to industry export variety are presented in section six, and conclusions are given in section seven.
- Published
- 2011