DeutschClear Cookie - decide language by browser settings
Felbermayr, Gabriel; Kohler, Wilhelm K. (2006): Exploring the intensive and extensive margins of world trade. In: Review of World Economics, Vol. 142, No. 4: pp. 642-674

This is the latest version of this item.

Full text not available from 'Open Access LMU'.


World trade evolves at two margins. Where a bilateral trading relationship already exists it may increase through time (intensive margin). But trade may also increase if a trading bilateral relationship is newly established between countries that have not traded with each other in the past (extensive margin). We provide an empirical dissection of post-World War II growth in manufacturing world trade along these two margins. We propose a "corner-solutions version" of the gravity model to explain movements on both margins. A Tobit estimation of this model resolves the so-called "distance puzzle". It also finds more convincing evidence than recent literature that WTO-membership enhances trade.

Available Versions of this Item