Export Margins, Price and Quantity of Belarus’s Export Growth

Open access

Abstract

This paper examines the sources of Belarus’s export growth and decomposes export growth into extensive and intensive margins. This study also aims to determine export margins for intermediate and final goods and to determine the price and quantity components of the intensive export margin. In order to achieve the desired objectives, we use two methods for decomposing export growth, the count method and the export shares method. We analyse Belarus's export growth using export data at the HS-6 digit level for the 2004-2014 period. Our results show that Belarus's exports grew mainly due to growth in the price margin during the studied period 2004-2014. However, the extensive margin was important in export growth to some extent. Comparing the growth rate across final and intermediate goods reveals that although the share of final products in Belarus’s exports is not very big (18.9% in 2014), the average annual growth in exports of final products is higher than that of intermediate goods. Our investigation also shows that Belarus produces a wide range of commodities, but the share of the most of these commodities is not large; its exports depend on a restricted range of commodities. Moreover, most of the commodities are exported to Russia and Ukraine. Our results give us reason to assume that finding new markets for their new products is one of the main challenges for developing countries wishing to increase their exports by an extensive margin. This has important implications for how policy makers promote the trade and diversification of exports.

AMITI, M. & FREUND, C. (2008), An Anatomy of China’s Trade Growth. World Bank Policy Research Working Paper, no.4628, 1-29.

AMURGO-PACHECO, A. & PIEROLA, M. D. (2008), Patterns of Export Diversification in Developing Countries, World Bank Policy Research Working Paper no.4473, 1-34.

BESEDES T., & PRUSA T.J. (2011). The Role of Extensive and Intensive Margins and Export Growth. Journal of Development Economics, 96(2), 371-379. DOI: 10.1016/j.jdeveco.2010.08.013

BERNARD, A.B., JENSEN, J.B., REDDING, S.J., & SCHOTT, P.K. (2009). The margins of US trade. American Economic Review, 99(2), 487-493. DOI: 10.1257/aer.99.2.487

BINGZHAN, S. (2011). Extensive margin, quantity and price in China’s export growth. China Economic Review, 22(2), 233-243. DOI: 10.1016/j.chieco.2011.01.007

COUGHLIN, C. C. (2012). Extensive and Intensive Trade Margins: A State-by-State View. [Online] Federal Reserve Bank Working Paper. Available from: http://research.stlouisfed.org [accessed 18/12/2015]

DUTT, P., MIHOV, I., & Van ZANDT, T. (2011), Does WTO Matter for the Extensive and the Intensive Margins of Trade? CEPR Discussion Papers, no. 8293, (pp.1-34).

EATON, J., ESLAVA, M., KUGLER, M., & TYBOUT, J. (2008). Exports Dynamics in Colombia: Transactions Level Evidence. Borradores de Economia, no.522, 1-39.

FEENSTRA, R.C., (1994). New Product Varieties and the Measurement of International Prices. The American Economic Review, 84(1), 157−177.

FELBERMAYR, G. J., & KOHLER W.K. (2004). Exploring the intensive and extensive margins of world trade. CESifo working papers, no.1276, (pp.1-46).

HELPMAN, E., MELITZ, M., & RUBINSTEIN, Y. (2008). Estimating Trade Flows: Trading Partners and Trading Volumes. The Quarterly Journal of Economics, 123(2), 441-487. http://doi.org/10.1162/qjec.2008.123.2.441

HUMMELS, D., & KLENOW, P. J. (2005). The Variety and Quality of a Nation’s Exports. American Economic Review, 95(3), 704-723.

KEHOE, T. J., & RUHL, K. J. (2003). How Important Is the New Goods Margin in International Trade ? Federal Reserve Bank of Minneapolis Research Department Staff Report, (pp.1-41).

MELITZ, M. J., (2003), The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica, 71(6), 1695-1725.

OTAMURODOV Sh, ZHU Sh., ZHONG T., & HAQ I. (2016). The role of extensive margin and intensive margin in Kazakhstan’s export growth. Ecoforum, Volume 5, 2(9), 9-16.

RISHAV B., (2015). Reconciling the WTO Effects on Trade at the Extensive and Intensive Margins. International Economic Journal, 29(2), 231-257. DOI: 10.1080/10168737.2015.1020622

ROMALIS, J., (2007). NAFTA's and CUSFTA's Impact on International Trade. The Review of Economics and Statistics, MIT Press, vol. 89(3), 416-435.

TURKCAN, K., (2014). Investigating the Role of Extensive Margin, Intensive Margin, Price and Quantity Components on Turkey’s Export Growth during 1998-2011. MPRA Paper, no.53292, (pp.1-72).

TOCHITSKAYA, I., (2011). How to Increase Sophistication of Belarus’ Export Basket. IPM Research Center Policy Paper, PP/02/2011, (pp.1-11).

Foreign Trade of the Republic of Belarus. Statistical Book 2015. [Online] National Statistical Committee of the Republic of Belarus. Available from: http://www.belstat.gov.by/upload/. [Accessed 06/05/2016] (pp19-98)

Ukraine's Foreign Trade. Statistical Yearbook. [Online] State Statistics Service of Ukraine. Kyiv 2016 Available from: http://www.ukrstat.gov.ua/druk/publicat/kat_u/2016/zb/06/Zb_zt2016pdf.zip. [Accessed 13/02/2017] (p. 26)

VEERAMANI, C., & GUPTA, P. (2014). Extensive and Intensive Margins of India’s Exports : Comparison with China. (IGIDR working paper WP-2014-011). Indira Gandhi Institute of Development Research, 1-38. [Online] Available from: http://www.igidr.ac.in/pdf/publication. [Accessed 05/03/2016]

Review of Economic Perspectives

Národohospodárský obzor; The Journal of Masaryk University

Journal Information


CiteScore 2017: 0.42

SCImago Journal Rank (SJR) 2017: 0.153
Source Normalized Impact per Paper (SNIP) 2017: 0.351

Metrics

All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 140 140 18
PDF Downloads 40 40 10