Simultaneous technologies and demand and supply conditions in international trade

If a country is not small enough to behave as a price taker in its export market, foreign demand conditions must be taken into account when estimating export supply functions. Also, when estimating demand or supply functions, it is desirable to use all prior theoretical knowledge and to estimate these functions jointly with the other demand and supply functions derived from the same technology. This calls for the simultaneous estimation of the technologies of all trading partners. For Canadian exports to the United States, we find that the simultaneous and joint estimation procedures bear heavily on the estimated price elasticities.