The Intensive and Extensive Margin of Chinese Foreign Trade: Calculation Based on the Customs Data
WU Xiao-kang1,2,3, ZHENG Ying4
1.Center for Chinese and American Studies, The Johns Hopkins University-Nanjing University, Nanjing 210093, China; 2.Asia-Pacific Development Research Center, Nanjing University, Nanjing 210093, China; 3. School of Economics, Nanjing University, Nanjing 210093, China; 4. School of Economics and Management, Nanjing Tech University, Nanjing 211800, China
This paper decomposes Chinese total export and import into intensive and extensive margin using transaction-level customs trade data during 2000—2006. We find that the contribution of intensive margin to trade growth is larger in the short run, while extensive margin is more important in the long run. The difference between this study and others lies in the definition of trade margins. Our definition is at firm-product-country level, while the others are at firm level or product-country level. We also examine the importance of the trade margins at the cross-sectional level. It is found that the trade variations at product and country level are mainly explained by extensive margin, and the variations at firm level are mainly explained by intensive margin.