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Trade Integration in Manufacturing: The Chilean Experience

Author

Listed:
  • Maria Bas

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

  • Ivan Ledezma

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract
Using bilateral trade flow data from 1979 to 1999, we estimate trade integration between Chile and its principal trading partners during the period (European Union, United States and Latin America). Our estimates are based on a gravity specification, theoretically grounded on a monopolistic competition framework with increasing returns. Trade barriers are measured following the border effect methodology by comparing inter-national imports to intra-national ones. Our results are consistent with the agenda of trade integration followed by Chile. Moreover, trade integration turns out to be heterogeneous across industries and over the time. We also find asymmetries between export and import oriented policies as well as between partners. All these features are usually missing when one uses direct measures of trade policies.
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Suggested Citation

  • Maria Bas & Ivan Ledezma, 2009. "Trade Integration in Manufacturing: The Chilean Experience," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00649966, HAL.
    • Handle: RePEc:hal:cesptp:hal-00649966
    DOI: 10.1007/978-3-211-92662-8_8
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    References listed on IDEAS

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    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
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