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Title: Three essays on frictions of trade
Author: Li, Wenjin Bella
ISNI:       0000 0004 7654 1436
Awarding Body: University of Oxford
Current Institution: University of Oxford
Date of Award: 2018
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By examining the case of the West Austria retail fuel market, Chapter 1 investigates the nature of price competition in a spatially differentiated, but otherwise homogeneous product market. A spatial model is utilised for estimating the spatial dependence relationship among various locations. With the aid of statistical and machine learning tools, no prior knowledge is required regarding the structure of spatial dependence. This feature distinguishes this paper from the precedent works in the field. The results indicate that competition is highly localised but differs greatly in terms of market concentration. In addition, while location centrality affects firms pricing strategies, distance (or closeness) between competitors is not an adequate proxy for measuring the strength of competitive interactions. The absence or poor quality of transport infrastructure can make it difficult for certain regions to access international markets. However, there is little empirical evidence on how improvements in domestic transport infrastructure stimulate international trade. Chapter 2 examines the relationship between China's regional trade patterns and national road infrastructure in the early 2000s. The analysis is based on an adapted gravity model with several alternative specifications for robustness checks. The result suggests that improvements on the road network lead to trade expansion on both intensive and extensive margins, but the effects vary across the regions. At the same time, sectors producing time-sensitive products benefit more from road construction and improvement. These findings support the claim that intranational trade costs, which have the same impact as international trade costs, are a determinant of comparative advantage and affect international trade patterns. Chapter 3 evaluates the potential economic costs of China's pronounced unilateral trade sanctions on Japan in the early 2000s and provides an interpretation of the strategies used by both countries. A two-type goods version of Eaton-Kortum model of trade is used. The model captures the basic features of the China-Japan trade relations. I experiment with counterfactual simulations and explore the economic costs on China, Japan and other countries with respect to the unilateral Chinese boycotts, embargoes, two-way blockages, import tariffs and export taxes. The results show that were China to implement trade sanctions against Japan, it would have lost more than Japan in terms of welfare change. Neighbours of both countries would have been impacted due to the spillover effects.
Supervisor: Rauch, Ferdinand Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available