The DOI matches its Crossref record; 41 of the 41 references it cites were found in a registry or an index.
Estimating Trade Flows: Trading Partners and Trading Volumes *
Open accessAbstract
We develop a simple model of international trade with heterogeneous firms that is consistent with a number of stylized features of the data. In particular, the model predicts positive as well as zero trade flows across pairs of countries, and it allows the number of exporting firms to vary across destination countries. As a result, the impact of trade frictions on trade flows can be decomposed into the intensive and extensive margins, where the former refers to the trade volume per exporter and the latter refers to the number of exporters. This model yields a generalized gravity equation that accounts for the self-selection of firms into export markets and their impact on trade volumes. We then develop a two-stage estimation procedure that uses an equation for selection into trade partners in the first stage and a trade flow equation in the second. We implement this procedure parametrically, semiparametrically, and nonparametrically, showing that in all three cases the estimated effects of trade frictions are similar. Importantly, our method provides estimates of the intensive and extensive margins of trade. We show that traditional estimates are biased and that most of the bias is due not to selection but rather due to the omission of the extensive margin. Moreover, the effect of the number of exporting firms varies across country pairs according to their characteristics. This variation is large and particularly so for trade between developed and less developed countries and between pairs of less developed countries.
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In the citing paper
“Endogeneity has been a major obstacle in gravity models.”
From Estimating the effects of trade agreements: Lessons from 60 years of methods and data (2024) · cites this paper as Helpman et al., 2008
In the citing paper
“the profession has struggled to address this issue using standard techniques (e.g., instrumental variable (IV) treatment) due to the fact that very often what determines the probability to sign a trade agreement also affects the volume of trade flows (Egger et al., 2008;Egger et al., 2011;Helpman et al., 2008;Jochmans & Verardi, 2022).”
From Estimating the effects of trade agreements: Lessons from 60 years of methods and data (2024) · cites this paper as Helpman et al., 2008
Citations
Cites
Sample Selection Bias as a Specification Error
Heckman, J. J. (1979) · Econometrica · doi:10.2307/1912352 · Cited by 28,779
(2001) · RePEc: Research Papers in Economics · Cited by 27,577
The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity
Melitz, M. J. (2003) · Econometrica · doi:10.1111/1468-0262.00467 · Cited by 12,309
Self-citationWhy do Some Countries Produce So Much More Output Per Worker than Others?
Hall, R. E., & Jones, C. I. (1999) · The Quarterly Journal of Economics · doi:10.1162/003355399555954 · Cited by 8,336
Gravity with Gravitas: A Solution to the Border Puzzle
Anderson, J. E., & van Wincoop, E. (2003) · American Economic Review · doi:10.1257/000282803321455214 · Cited by 7,566
(2012) · American Economic Review · doi:10.1257/aer.102.7.i · Cited by 7,275
Silva, J. M. C. S., & Tenreyro, S. (2006) · The Review of Economics and Statistics · doi:10.1162/rest.88.4.641 · Cited by 6,408
Frankel, J. A., & Romer, D. (1999) · American Economic Review · doi:10.1257/aer.89.3.379 · Cited by 5,593
Economic Reform and the Process of Global Integration
Sachs, J. D., Warner, A., Aslund, A., & Fischer, S. (1995) · Brookings Papers on Economic Activity · doi:10.2307/2534573 · Cited by 4,950
Technology, Geography, and Trade
Eaton, J., & Kortum, S. (2002) · Econometrica · doi:10.1111/1468-0262.00352 · Cited by 4,485
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Cited by
Sorted by citations
The Economic Consequences of Legal Origins
Porta, R. L., Lopez-de-Silanes, F., & Shleifer, A. (2008) · Journal of Economic Literature · doi:10.1257/jel.46.2.285 · Cited by 3,220
Gravity Equations: Workhorse,Toolkit, and Cookbook
Head, K., & Mayer, T. (2014) · Handbook of International Economics · doi:10.1016/b978-0-444-54314-1.00003-3 · Cited by 1,565
“…heterogenous firms literature (2008): 2008 was the third pivotal year for research on gravity as it saw the publication of three papers—Chaney (2008), Helpman et al. (2008), Melitz and Ottaviano (2008)—that united recent work on heterogeneous firms with the determination of bilateral trade flows.”
InfluentialRailroads of the Raj: Estimating the Impact of Transportation Infrastructure
Donaldson, D. (2018) · American Economic Review · doi:10.1257/aer.20101199 · Cited by 1,665
New Trade Models, Same Old Gains?
Arkolakis, C., Costinot, A., & Rodríguez-Clare, A. (2012) · American Economic Review · doi:10.1257/aer.102.1.94 · Cited by 1,707
Credit Constraints, Heterogeneous Firms, and International Trade
Manova, K. B. (2012) · The Review of Economic Studies · doi:10.1093/restud/rds036 · Cited by 1,242
“In the absence of systematic crosscountry data at the micro level, I quantify these two mechanisms with a two-stage structural estimation procedure in the spirit of Helpman et al. (2008).”
Metadata
- Authors
- Helpman, E., Melitz, M., & Rubinstein, Y.
- Affiliations
- Canadian Institute for Advanced Research (CA)
- National Bureau of Economic Research (US)
- Venue
- Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 2008-05
- Volume
- 123
- Issue
- 2
- Pages
- 441-487
- ISSN
- 0033-5533 (ISSN-L)
- 1531-4650
- OpenAlex
- W3122837923
- Cited by
- 2,436
- References
- 41
- Citations by year
- 2026: 99 · 2025: 93 · 2024: 104 · 2023: 91 · 2022: 111 · 2021: 115 · 2020: 114 · 2019: 105 · 2018: 126 · 2017: 132 · 2016: 157 · 2015: 200 · 2014: 204 · 2013: 196 · 2012: 174
- FWCI
- 286.17
- Type
- journal article
- Language
- en
- Open access
- green
- nrs.harvard.edu
- Licence
- cc-by
- Locations
- The Quarterly Journal of Economics (publishedVersion)
- Digital Access to Scholarship at Harvard (DASH) (Harvard University) (submittedVersion, cc-by)
- RePEc: Research Papers in Economics (submittedVersion)
- London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Technological Innovation
- Social Sciences › Business, Management and Accounting › Strategy and Management › Global Trade and Competitiveness
- Keywords
- international trade, trade flows, gravity model, trade friction, heterogeneous firms, intensive margin, extensive margin, exporters, two-stage estimation, selection bias, developed and developing countries
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