DP7156 The Margins of US Trade (Long Version)

Author(s): Andrew B. Bernard, J Bradford Jensen, Stephen J. Redding, Peter K. Schott
Publication Date: February 2009
Keyword(s): heterogeneous firms, product differentiation, product market entry and exit
JEL(s): F1
Programme Areas: International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=7156

Recent research in international trade emphasizes the importance of firms' extensive margins for understanding overall patterns of trade as well as how firms respond to specific events such as trade liberalization. In this paper, we use detailed U.S. trade statistics to provide a broad overview of how the margins of trade contribute to variation in U.S. imports and exports across trading partners, types of trade (i.e., arm's-length versus related-party) and both short and long time horizons. Among other results, we highlight the differential behavior of related-party and arm's-length trade in response to the 1997 Asian financial crisis.