The Network Structure of International Trade
AbstractMotivated by empirical evidence I uncover on the dynamics of French firms exports, I offer a novel theory of trade frictions. Firms only export into markets where they have a contact. They directly search for new trading partners, but also use their existing network of contacts to remotely search for new partners. I characterize the dynamic formation of an international network of exporters in this model. I structurally estimate this model on French data and confirm its predictions regarding the distribution of the number of foreign markets accessed by exporters and the geographic distribution of exports.
CitationChaney, Thomas. 2014. "The Network Structure of International Trade." American Economic Review, 104 (11): 3600-3634. DOI: 10.1257/aer.104.11.3600
- D85 Network Formation and Analysis: Theory
- F11 Neoclassical Models of Trade
- F14 Empirical Studies of Trade
- L24 Contracting Out; Joint Ventures; Technology Licensing