Supply Chain

A RE-EXAMINATION OF THE LINDER HYPOTHESIS: A RANDOM-EFFECTS TOBIT APPROACH M. A. MCPHERSON, M. R. REDFEARN AND M. A. TIESLAU* Department of economics University of coupling Texas P.O. Box 311457 Denton, TX 76203-1457 ABSTRACT This paper examines one of the main theories of internationalist trade, the Linder hypothesis, using data from the OECD countries. The paper makes two primary contributions. First, evidentiary empirical evidence is found in support of Linders hypothesis regarding demand similarity for 18 of the 19 OECD countries low investigation here. Second, the use of a censored dependent variable quantity in this analysis corrects a major methodological blemish in the existing literature by including data on all potential trading partners, even when the given OECD country has a zero or negative desire to exportation to that potential trading partner. KEYWORDS: international trade, panel data, censored regression toward the mean JEL CODES: F10, C23, C24 *The authors gratefully acknowledge the valuable comments and suggestions of Daniel Hamermesh, Jerry Thursby, Jeffrey Bergstrand, Mark Wohar, and two unknown referees as well as participants at the 1998 Eastern Economics Association annual meetings. Any remaining errors are our own. 2 1.

existence The purpose of this study is to hand over some insight into the factors that find out trade behavior through an examination of the empirical validness of one postulate of the Linder theory, one of the main theories of international trade. In order to properly direct international trade policy, it is most-valuable to understand the factors that motivate countries to export and import particular goods. thither is some question, at present, as to whether or not the spark advance theories of international trade adequately describe these motivations. Our analysis seeks to provide answers to this question. The model that has dominated international trade theory for some(prenominal) of this century is the factor proportions theory which was... If you want to get a full essay, order it on our website: Ordercustompaper.com

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