Robert C. Feenstra
- Published in print:
- 2010
- Published Online:
- August 2013
- ISBN:
- 9780262062800
- eISBN:
- 9780262289375
- Item type:
- book
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262062800.001.0001
- Subject:
- Business and Management, International Business
The application of the monopolistic competition model to international trade by Elhanan Helpman, Paul Krugman, and Kelvin Lancaster was one of the great achievements of international trade theory in ...
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The application of the monopolistic competition model to international trade by Elhanan Helpman, Paul Krugman, and Kelvin Lancaster was one of the great achievements of international trade theory in the 1970s and 1980s. Monopolistic competition models have required new empirical methods to implement their theoretical insights, however, and this book describes methods that have been developed to measure the product variety of imports and the gains from trade that are due to product variety. It first considers the consumer benefits from having access to new import varieties of differentiated products, and examines a recent method to estimate the elasticity of substitution (the extent of differentiation across products) and to use that information to construct the gains from import variety. The book then examines claims of producer benefit from export variety, arguing that the self-selection of the more productive firms (as the low-productivity firms exit the market) can be interpreted as a gain from product variety. It makes use of a measurement of product variety known as the extensive margin of exports and imports. Finally, the book considers an alternative approach to quantifying the gains due to product variety by comparing real GDP calculated with and without the extensive margin of trade.Less
The application of the monopolistic competition model to international trade by Elhanan Helpman, Paul Krugman, and Kelvin Lancaster was one of the great achievements of international trade theory in the 1970s and 1980s. Monopolistic competition models have required new empirical methods to implement their theoretical insights, however, and this book describes methods that have been developed to measure the product variety of imports and the gains from trade that are due to product variety. It first considers the consumer benefits from having access to new import varieties of differentiated products, and examines a recent method to estimate the elasticity of substitution (the extent of differentiation across products) and to use that information to construct the gains from import variety. The book then examines claims of producer benefit from export variety, arguing that the self-selection of the more productive firms (as the low-productivity firms exit the market) can be interpreted as a gain from product variety. It makes use of a measurement of product variety known as the extensive margin of exports and imports. Finally, the book considers an alternative approach to quantifying the gains due to product variety by comparing real GDP calculated with and without the extensive margin of trade.
Donald B. Rosenfield
- Published in print:
- 2014
- Published Online:
- May 2014
- ISBN:
- 9780262019927
- eISBN:
- 9780262319126
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262019927.003.0008
- Subject:
- Business and Management, Innovation
Using the lens of onshoring versus offshoring, this chapter draws on interviews with executive at large firms with substantial manufacturing presence in the US, finding that interviewees cited a ...
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Using the lens of onshoring versus offshoring, this chapter draws on interviews with executive at large firms with substantial manufacturing presence in the US, finding that interviewees cited a number of reasons for locating production offshore. In addition, the author develops an analytic model of the total cost of a product and how various product characteristics might affect that cost. The model identifies innovativeness as a factor that supports onshoring as well as pointing out that product variety itself is a form of innovation. Three major factors foster onshoring: innovation in products and processes, a low ratio of value to weight, and a high variety of products.Less
Using the lens of onshoring versus offshoring, this chapter draws on interviews with executive at large firms with substantial manufacturing presence in the US, finding that interviewees cited a number of reasons for locating production offshore. In addition, the author develops an analytic model of the total cost of a product and how various product characteristics might affect that cost. The model identifies innovativeness as a factor that supports onshoring as well as pointing out that product variety itself is a form of innovation. Three major factors foster onshoring: innovation in products and processes, a low ratio of value to weight, and a high variety of products.
Robert C. Feenstra
- Published in print:
- 2010
- Published Online:
- August 2013
- ISBN:
- 9780262062800
- eISBN:
- 9780262289375
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262062800.003.0005
- Subject:
- Business and Management, International Business
This chapter presents an alternative approach for measuring world gains from trade due to product variety using real gross domestic product (GDP). It explains that the standard of living or real GDP ...
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This chapter presents an alternative approach for measuring world gains from trade due to product variety using real gross domestic product (GDP). It explains that the standard of living or real GDP on the expenditure side (RGDE) measures the consumption of countries at a set of common reference prices while real output of countries or real GDP on the output side (RGDO) measures the production of countries at a set of common reference prices. It discusses the calculation of RGDE and RGDO either by using observed export and import prices for countries or by adjusting the export and import prices for product variety.Less
This chapter presents an alternative approach for measuring world gains from trade due to product variety using real gross domestic product (GDP). It explains that the standard of living or real GDP on the expenditure side (RGDE) measures the consumption of countries at a set of common reference prices while real output of countries or real GDP on the output side (RGDO) measures the production of countries at a set of common reference prices. It discusses the calculation of RGDE and RGDO either by using observed export and import prices for countries or by adjusting the export and import prices for product variety.
Robert C. Feenstra
- Published in print:
- 2010
- Published Online:
- August 2013
- ISBN:
- 9780262062800
- eISBN:
- 9780262289375
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262062800.003.0001
- Subject:
- Business and Management, International Business
This introductory chapter discusses the theme of this volume which is about the measurement of product variety of imports and exports and the gains from trade due to product variety. The contents of ...
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This introductory chapter discusses the theme of this volume which is about the measurement of product variety of imports and exports and the gains from trade due to product variety. The contents of this volume were delivered as the Zeuthen Lectures at the University of Copenhagen in April 2007 and at the University of Nottingham in April 2008. This volume examines consumer benefits from import variety, producer benefits from export variety, the extensive margin of trade and country productivity and the role of product variety on the measurement of real gross domestic product (GDP).Less
This introductory chapter discusses the theme of this volume which is about the measurement of product variety of imports and exports and the gains from trade due to product variety. The contents of this volume were delivered as the Zeuthen Lectures at the University of Copenhagen in April 2007 and at the University of Nottingham in April 2008. This volume examines consumer benefits from import variety, producer benefits from export variety, the extensive margin of trade and country productivity and the role of product variety on the measurement of real gross domestic product (GDP).
Robert C. Feenstra
- Published in print:
- 2010
- Published Online:
- August 2013
- ISBN:
- 9780262062800
- eISBN:
- 9780262289375
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262062800.003.0004
- Subject:
- Business and Management, International Business
This chapter provides a more detailed analysis of the measurement of product variety in trade. It shows how to construct the extensive margin of exports using import data for a country from its ...
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This chapter provides a more detailed analysis of the measurement of product variety in trade. It shows how to construct the extensive margin of exports using import data for a country from its partners and the world and the extensive margin of imports using export data for a country from its partners and the world. It also describes the application of extensive margin of exports to a study by Robert Feenstra and Hiau Looi Kee in order to estimate the gains from variety growth for 48 countries exporting to the U.S. over 1980 to 2000.Less
This chapter provides a more detailed analysis of the measurement of product variety in trade. It shows how to construct the extensive margin of exports using import data for a country from its partners and the world and the extensive margin of imports using export data for a country from its partners and the world. It also describes the application of extensive margin of exports to a study by Robert Feenstra and Hiau Looi Kee in order to estimate the gains from variety growth for 48 countries exporting to the U.S. over 1980 to 2000.
Robert C. Feenstra
- Published in print:
- 2010
- Published Online:
- August 2013
- ISBN:
- 9780262062800
- eISBN:
- 9780262289375
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262062800.003.0006
- Subject:
- Business and Management, International Business
This chapter sums up the key findings of this study on the measurement of product variety of imports and exports and the gains from trade due to product variety. The findings indicate that trade ...
More
This chapter sums up the key findings of this study on the measurement of product variety of imports and exports and the gains from trade due to product variety. The findings indicate that trade gives results quite similar to real openness because it has a positive real gross domestic product (GDP). The results also challenge the conventional wisdom that small countries gain the most from international trade. This chapter also highlights the importance of trade in promoting higher GDP and real incomes.Less
This chapter sums up the key findings of this study on the measurement of product variety of imports and exports and the gains from trade due to product variety. The findings indicate that trade gives results quite similar to real openness because it has a positive real gross domestic product (GDP). The results also challenge the conventional wisdom that small countries gain the most from international trade. This chapter also highlights the importance of trade in promoting higher GDP and real incomes.
