Product Differentiation and Duration of US Import Trade

20 Pages Posted: 8 Oct 2010

See all articles by Tibor Besedes

Tibor Besedes

Georgia Institute of Technology

Thomas J. Prusa

Rutgers University

Date Written: November 26, 2005

Abstract

We examine the extent to which product differentiation affects duration of US import trade relationships. The results are consistent with a matching model of trade formation. Using highly disaggregated product level data we estimate the hazard rate is at least 23% higher for homogeneous goods than for differentiated products. The results are not only highly robust but are often strengthened under alternative specifications. As the smallest relationships are dropped, differences across product types increase. Controlling for potential measurement errors also results in larger differences across product types.

Suggested Citation

Besedes, Tibor and Prusa, Thomas J., Product Differentiation and Duration of US Import Trade (November 26, 2005). Journal of International Economics, Vol. 70, No. 2, p. 339, 2006, Available at SSRN: https://ssrn.com/abstract=1689046

Tibor Besedes (Contact Author)

Georgia Institute of Technology ( email )

221 Bobby Dodd Way
Atlanta, GA 30332-0615
United States

Thomas J. Prusa

Rutgers University ( email )

Dept of Economics
75 Hamilton St
New Brunswick, NJ 08901
United States
848-932-8646 (Phone)
732-932-7416 (Fax)

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