Empirical Economics

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

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

  • Huimin ShiEmail author
  • Zheng Jiang


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.


Extensive margin Balls-and-bins China’s trade 

JEL Classification

F14 F17 



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)


  1. Armenter R, Koren M (2014) A balls-and-bins model of trade. Am Econ Rev 104(7):2127–2151CrossRefGoogle Scholar
  2. Baldwin R, Harrigan J (2011) Zeros, quality, and space: trade theory and trade evidence. Am Econ J Microecon 3(2):60–88CrossRefGoogle Scholar
  3. Bernard AB, Eaton J, Jensen B, Kortum S (2003) Plants and productivity in international trade. Am Econ Rev 93(4):1268–1290CrossRefGoogle Scholar
  4. Bernard AB, Redding SJ, Schott PK (2011) Multiproduct firms and trade liberalization. Quart J Econ 126(3):1271–1318CrossRefGoogle Scholar
  5. Bernard AB, Blanchard EJ, Beveren IV, Vandenbussche HY (2014) Carry-along trade. Working paperGoogle Scholar
  6. Eaton J, Kortum S (2002) Technology, geography, and trade. Econometrica 70(5):1741–1779CrossRefGoogle Scholar
  7. Helpman E, Krugman P (1987) Market structure and foreign trade: increasing returns, imperfect competition, and the international economy. The MIT Press, CambridgeGoogle Scholar
  8. Helpman E, Melitz M, Rubinstein Y (2008) Estimating trade flows: trading partners and trading volumes. Quart J Econ 123(2):441–487CrossRefGoogle Scholar
  9. Hummels D, Klenow P (2005) The variety and quality of a nation’s exports. Am Econ Rev 95(3):704–723CrossRefGoogle Scholar
  10. Melitz M (2003) The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica 71(6):1695–1725CrossRefGoogle Scholar

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

Personalised recommendations