The Annals of Regional Science

, Volume 51, Issue 2, pp 495–513 | Cite as

The agglomeration of exporters by destination

Original Paper

Abstract

Precise characterization of informational trade barriers is neither well documented nor understood. Using Russian customs data, we document that regional destination-specific export spillovers exist for developing countries, extending a result that was only known for developed countries. This result suggests behavior responding to a destination barrier. To account for this fact, we build on a monopolistic competition model of trade by postulating an externality in the international transaction of goods. We test the model’s prediction on region-level exports using Russian data and find improvement over gravity-type models without agglomeration. This finding has important development implications in that export policy that considers current trade partners may be more effective than policy that focuses only on the exporting country’s industries. Furthermore, our findings can be considered in the burgeoning literature refining transaction costs beyond the traditional iceberg cost.

JEL Classification

D23 F12 L29 

References

  1. Anderson JE, van Wincoop E (2003) Gravity with gravitas: a solution to the border puzzle. Am Econ Rev 93(1):170–192CrossRefGoogle Scholar
  2. Armenter R, Koren M (2010) A balls-and-bins model of trade, unpublishedGoogle Scholar
  3. Axtell RL (2001) Zipf distribution of US firm sizes. Science 293(5536):1818–1820CrossRefGoogle Scholar
  4. Bernard AB, Jensen JB (2004) Why some firms export. Rev Econ Stat 86(2):561–569CrossRefGoogle Scholar
  5. Besedeš T, Prusa TJ (2006) Product differentiation and duration of US import trade. J Int Econ 70(2): 339–358CrossRefGoogle Scholar
  6. Bradshaw M (2008) The geography of Russia’s new political economy. New Polit Econ 13(2):193–201CrossRefGoogle Scholar
  7. Broadman HG, Recanatini F (2001) Where has all the foreign investment gone in Russia? World Bank Policy Research working paper no. 2640Google Scholar
  8. Cassey AJ (2009) State export data: origin of movement vs. origin of production. J Econ Soc Meas 34(4):241–268. doi:10.3233/JEM-2009-0323 Google Scholar
  9. Cassey AJ (2012) An application of the Ricardian trade model with trade costs. Appl Econ Lett 19(13): 1227–1230CrossRefGoogle Scholar
  10. Cassey AJ, Schmeiser KN (2013) Six comparisons of firm-level and product-level data. Appl Econ Lett 20(4):382–385CrossRefGoogle Scholar
  11. Chaney T (2008) Distorted gravity: the intensive and extensive margins of international trade. Am Econ Rev 98(4):1707–1721CrossRefGoogle Scholar
  12. Choquette E, Meinen P (2011) Export spillovers and the extensive and intensive margins of trade, http://www.etnpconferences.net/sea/sea2011/PaperSubmissions/Submissions2011/S-F-22.pdf, unpublished
  13. Crozet M, Koenig P (2010) Structural gravity equations with intensive and extensive margins. Can J Econ 43(1):41–62CrossRefGoogle Scholar
  14. Eaton J, Eslava M, Kugler M, Tybout JE (2008) Export growth in Colombia: firm-level evidence. In: Helpman E, Marin D, Verdier T (eds) The organization of firms in a global economy. Harvard University Press, Cambridge, pp 231–272Google Scholar
  15. Eaton J, Kortum S, Kramarz F (2011) An anatomy of international trade: evidence from French firms. Econometrica 79(5):1453–1498CrossRefGoogle Scholar
  16. Fujita M, Thisse JF (1996) Economics of agglomeration. J Jpn Int Econ 10(4):339–378CrossRefGoogle Scholar
  17. Glejser H, Jacquemin A, Petit J (1980) Exports in an imperfect competition framework: an analysis of 1,446 exporters. Q J Econ 94(3):507–524CrossRefGoogle Scholar
  18. Head K, Ries J, Swenson D (1995) Agglomeration benefits and location choice: evidence from Japanese manufacturing investments in the United States. J Int Econ 38(3–4):223–247CrossRefGoogle Scholar
  19. Hummels D (2001) Toward a geography of trade costs. Center for Global Trade Analysis, Purdue University GTAP working paper no. 1162Google Scholar
  20. IMF (2006) World economic outlook database. international monetary fund, Washington, DC, http://www.imf.org/external/pubs/ft/weo/2006/01/data/index.htm. Accessed Dec 15, 2006
  21. Koenig P (2009) Agglomeration and the export decisions of French firms. J Urban Econ 66(3):186–195CrossRefGoogle Scholar
  22. Koenig P, Mayneris F, Poncet S (2010) Local export spillovers in France. Eur Econ Rev 54(4):622–641CrossRefGoogle Scholar
  23. Korinek J, Sourdin P (2010) Maritime transport costs and their impact on trade. Appl Econ Perspect Policy 32(3):417–435CrossRefGoogle Scholar
  24. Krautheim S (2012) Heterogenous firms, exporter networks and the effect of distance on international trade. J Inter Econ 87(1):27–35CrossRefGoogle Scholar
  25. Le Gallo J, Dall’erba S (2008) Spatial and sectoral productivity convergence between european regions, 1975–2000. Pap Reg Sci 87(4):505–525CrossRefGoogle Scholar
  26. Lovely ME, Rosenthal SS, Sharma S (2005) Information, agglomeration, and the headquarters of US exporters. Reg Sci Urban Econ 35(2):167–191CrossRefGoogle Scholar
  27. Marshall A (1920) Principles of economics, Revised edn. Macmillan, LondonGoogle Scholar
  28. Martin P, Mayer T, Mayneris F (2008) Spatial concentration and firm-level productivity in France. CEPR discussion paper no. 6858Google Scholar
  29. Melitz MJ (2003) The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica 71(6):1695–1725CrossRefGoogle Scholar
  30. Micco A, Pérez N (2002) Determinants of maritime transport costs. http://www.iadb.org/res/publications/pubfiles/pubWP-441.pdf, Inter-American Development Bank working paper no. 441
  31. Nuadé W, Matthee M (2007) The geographical location of manufacturing exporters in South Africa, United Nations University-World Institute for Development Economics Research working paper no. 2007/09Google Scholar
  32. Ottaviano G, Tabuchi T, Thisse JF (2002) Agglomeration and trade revisited. Int Econ Rev 43(2):409–436CrossRefGoogle Scholar
  33. Rauch J (1999) Networks versus markets in international trade. J Int Econ 48(1):7–35CrossRefGoogle Scholar
  34. Russia (2004, 2006) All regions trade and investment guide. CTEC Publishing LLC, MoscowGoogle Scholar
  35. Schmeiser K (2012) Learning to export: Export growth and the destination decision of firms. J Int Econ 87(1):89–97CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  1. 1.School of Economic SciencesWashington State UniversityPullmanUSA
  2. 2.Department of EconomicsMt. Holyoke CollegeSouth HadleyUSA

Personalised recommendations