Revisiting the Olympic Effect

By utilizing the log‐linear gravity model, other authors have found statistically robust, permanent and large effects of hosting mega‐events (e.g. Olympics) on international exports. Surprisingly, they found that the unsuccessful bidders to host the Olympics experienced a similar impact on exports. Utilizing alternate specification such as the Poisson pseudo‐maximum likelihood (PPML) estimation that allows for heteroskedasticity prevalent in trade data, the this paper fails to find a robust positive effect of hosting and bidding for a mega‐event on total aggregate exports. Under heteroskedasticity, the parameters of log‐linearized models estimated by ordinary least squares (OLS) lead to biased estimates of the true elasticities.     

Time zones,GDP & exports

Recent studies have established a negative effect of time zone differences on trade flows. We extend this literature by examining whether a country’s economic size is relevant in its’ response to an increase in time zone differences. We argue that the negative impact of time zone differences should be more important for low-income countries as these countries often face higher trade costs and have firms with lower productivity compared to its high-income counterparts. To examine this heterogeneous impact, we interact the time zone measure with various quartiles of GDP. We find that these low-income countries face a much higher negative impact of time zone differences on exports compared to high-income countries. Our results help explain why the small countries of Samoa and Tokelau changed time zones to closely align with their main trading partners, while high-income countries have not taken such steps.     

Time Zone Effect and the Margins of Exports

The negative effect of time zone on trade flows has recently been established in the literature. However, thus far, no paper has explored the differing time zone effect on the intensive and extensive margin. Utilising product‐level trade data, this paper examines the impact of time zone differences on the intensive and extensive margin of exports. Furthermore, this paper examines the non‐linear impact of different levels of time zone differences on exports. Using the Poisson pseudo‐maximum likelihood estimation, the results indicate that the time zone differences negatively affect exports primarily via the extensive margin, with no effect on the intensive margin, which suggests that time zone differences act as a fixed cost of exporting. Furthermore, quartile analysis shows non‐linearities in the time zone measure, more specifically that time zones matter more at larger time zone differences. These results can have important policy implications for nations looking to increase their trade presence.     

Reconciling the WTO Effects on Trade at the Extensive and Intensive Margins

Empirical studies examining the impact of World Trade Organization (WTO) membership have produced disparate results. These studies, however, have focused on total aggregate trade flows. In this paper, we utilize disaggregated product level data to examine the impact of WTO membership on the product level extensive and intensive margin of imports. Utilizing the Poisson Pseudo-Maximum Likelihood (PPML) estimation that allows for heteroskedasticity in trade data and accounting for several estimation issues, we do not find a positive impact on either margins between WTO member country-pairs. Once we examine asymmetries in trade flows across countries based on their level of development, we find that developing WTO members experience an increase in the extensive margin from industrial member countries. Additionally, the industrial WTO members also experience an increase in the extensive margin from developing WTO members. Results suggest that WTO facilitates the North–South trade relationship, which has been largely absent in trade literature.