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Empirical Economics

, Volume 50, Issue 4, pp 1511–1526 | Cite as

The missing trade of China: balls-and-bins model

  • Huimin Shi
  • Zheng Jiang
Article

Abstract

Our paper applies the balls-and-bins model to China’s shipment level trade data of 2005. Similar to the results of the US data, we find that the balls-and-bins model matches the numbers and the gravity patterns of zero trade flows both at the country-product and country-firm levels reasonably well, but fails to predict the percentage of exporting firms as in the data. However, different from the results of the US data, we find that the model fails to predict the percentages of the single-product, single-destination, or single-product and single-destination exporting firms as in the data.

Keywords

Extensive margin Balls-and-bins China’s trade 

JEL Classification

F14 F17 

Notes

Acknowledgments

We are very grateful to the coordinating editor of this journal, Robert M. Kunst, and an anonymous referee for their constructive comments and valuable suggestions, which significantly improved this paper. We also would like to thank Paul Evans and Bill Dupor for their valuable comments.

Supplementary material

181_2015_987_MOESM1_ESM.pdf (203 kb)
Supplementary material 1 (pdf 202 KB)

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.School of EconomicsRenmin University of ChinaBeijingChina
  2. 2.China Academy of Public Finance and Public PolicyCentral University of Finance and EconomicsBeijingChina

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