Keith Head
Biographic Data
| ID | 3713468 |
|---|---|
| NAME | Keith Head |
| GIVEN NAMES | Keith |
| FAMILY NAME | Head |
| SIGNATURE | HEAD K |
| AFFILIATIONS | University of British Columbia |
| VERIFIED | No |
| TOTAL WORKS | 21 |
| TOTAL CITATIONS | 147 |
| AUTHOR COUNT | 21 |
| EDITOR COUNT | 0 |
| FIRST PUBLICATION YEAR | 1995 |
| LATEST PUBLICATION YEAR | 2026 |
| H-INDEX | 4 |
Poor Substitutes? Counterfactual Methods in Industrial Organization and Trade Compared
Constant elasticity of substitution (CES) demand for monopolistically competitive firm varieties is a standard tool for models in international trade and macroeconomics. Intervariety substitution in this model follows a simple share proportionality rule. In contrast, the standard tool kit in industrial organization (IO) estimates a system in which cross-elasticities depend on similarity in observable attributes. The gain in realism from the IO ap…
The United States of Europe: A Gravity Model Evaluation of the Four Freedoms
One of the pillars of the 1957 Treaty of Rome that ultimately led to the European Union is the commitment to the four freedoms of movement (goods, services, persons, and capital). Over the following decades, as the members expanded in numbers, they also sought to deepen the integration amongst themselves in all four dimensions. This paper estimates the success of these policies based primarily on a gravity framework. Distinct from past evaluation…
Geography, Ties, and Knowledge Flows: Evidence from Citations in Mathematics
Combining data on locations with career and educational histories of mathematicians, we study how distance and ties affect citation patterns. The ties considered include coauthorship, past colocation, and relationships mediated by advisers and the alma mater. With fixed effects capturing subject similarity and article quality, we find linkages are strongly associated with citation. Controlling for ties generally halves the negative impact of geog…
Summaries of Doctoral Dissertations
I was honored that Lee Alston asked me to be the convener for the Nevins Prize Competition this year. There were close to a dozen submissions spanning a
Gravity Equations: Workhorse,Toolkit, and Cookbook
The Economics of Cross-Border Travel
We model the decision to travel across an international border as a trade-off between benefits derived from buying a range of products at lower prices and the costs of travel. We estimate the model using microdata on Canada–United States travel. Price differences motivate cross-border travel; a 10% home appreciation raises the propensity to cross by 8% to 26%. The larger elasticity arises when the home currency is strong, a result predicted by th…
From Beijing to Bentonville: Do multinational retailers link markets
Quality Sorting and Trade: Firm-level Evidence for French Wine
Empirical investigation of the quality interpretation of the Melitz (2003) model of firm heterogeneity and trade has been limited by the lack of direct data on quality. This paper matches firm-level export data with expert assessments of the quality of champagne producers to estimate the key parameters of that model. Quality monotonically increases firm-level prices, the probability of market entry, and export values. The estimated model—which ca…
The erosion of colonial trade linkages after independence
Most independent nations today were part of empires in 1945. Using bilateral trade data from 1948 to 2006, we examine the effect of independence on post-colonial trade. While there is little short-run effect on trade, after four decades trade with the metropole (colonizer) has contracted by about 65%. Hostile separations lead to large, immediate reductions in trade. We also find that trade between former colonies of the same empire erodes as much…
Gravity, market potential and economic development
This article provides evidence on the long-term impact of market potential on economic development. It derives from the New Economic Geography literature a structural estimation where the level of factors' income of a country is related to its proximity to large markets, referred to as ‘market potential’. The empirical part evaluates this market potential for all countries in the world with available trade data over the 1965–2003 period and relat…
The Puzzling Persistence of the Distance Effect on Bilateral Trade
One of the best-established empirical results in international economics is that bilateral trade decreases with distance. Although well known, this result has not been systematically analyzed before. We examine 1,467 distance effects estimated in 103 papers. Information collected on each estimate allows us to test hypotheses about the causes of variation in the estimates. Our most interesting finding is that the estimated negative impact of dista…
How remote is the offshoring threat
Detection of Local Interactions From the Spatial Pattern of Names in France
Using data on the geographic distribution of names in France, we investigate the social transmission of parental preferences. Drawing on recent work on nonmarket interactions, we develop a linear discrete choice model that relates choices made in one location to those made in nearby areas. We explain the shares of parents that give their children Saint, Arabic, and American‐type names. We also examine the effect of distance between locations on d…
Market Potential and the Location of Japanese Investment in the European Union
This paper develops a theoretical model of location choice under imperfect competition to formalize the notion that firms prefer to\nlocate “where the markets are.” The profitability of a location depends on\na term that weights demand in all locations by accessibility. Using a sample of Japanese firms’ choices of regions within European countries, we compare the theoretically derived measure of market potential with the\nstandard form used by ge…
Immigration and the Trade of Provinces
A link between immigration, imports, and exports has been found by a number of papers that have used the gravity equation to analyze bilateral trade patterns. We discuss what this research implies about the mechanisms through which immigrants expand trade and identify strengths and weakness of the various approaches. This paper also contributes to this literature by estimating immigrant effects for Canada using cross‐province variation in interna…
On the Pervasiveness of Home Market Effects
Paul Krugman’s model of trade predicts that the country with the relatively large number of consumers is the net exporter and hosts a disproportionate share of firms in the increasing returns sector. He terms these results ‘home market effects’. This paper analyses three additional models featuring increasing returns, firm mobility, and trade costs to assess the robustness of home market effects to alternative modelling assumptions. We find strik…
The Geographic Concentration of Fdi in Asia
Increasing Returns Versus National Product Differentiation as an Explanation for the Pattern of U.S.–Canada Trade
We evaluate two alternative models of international trade in differentiated products. An increasing returns model where varieties are linked to firms predicts home market effects: increases in a country's share of demand cause disproportionate increases in its share of output. In contrast, a constant returns model with national product differentiation predicts a less than proportionate increase. We examine a panel of U.S. and Canadian manufacturi…
Immigration and Trade Creation: Econometric Evidence from Canada
Immigrants may expand trade with their country of origin, owing to superior knowledge of, or preferential access to, market opportunities. The authors test this proposition using Canadian trade data with 136 partners from 1980 to 1992. In an augmented gravity equation, they find that a 10 percent increase in immigrants is associated with a 1 percent increase in Canadian exports to the immigrant's home country and a 3 percent increase in imports. …
Inter-City Competition for Foreign Investment: Static and Dynamic Effects of China's Incentive Areas
Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States
Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States
Inter-City Competition for Foreign Investment: Static and Dynamic Effects of China's Incentive Areas
Immigration and the Trade of Provinces
A link between immigration, imports, and exports has been found by a number of papers that have used the gravity equation to analyze bilateral trade patterns. We discuss what this research implies about the mechanisms through which immigrants expand trade and identify strengths and weakness of the various approaches. This paper also contributes to this literature by estimating immigrant effects for Canada using cross‐province variation in interna…
On the Pervasiveness of Home Market Effects
Paul Krugman’s model of trade predicts that the country with the relatively large number of consumers is the net exporter and hosts a disproportionate share of firms in the increasing returns sector. He terms these results ‘home market effects’. This paper analyses three additional models featuring increasing returns, firm mobility, and trade costs to assess the robustness of home market effects to alternative modelling assumptions. We find strik…
From Beijing to Bentonville: Do multinational retailers link markets
Gravity, market potential and economic development
This article provides evidence on the long-term impact of market potential on economic development. It derives from the New Economic Geography literature a structural estimation where the level of factors' income of a country is related to its proximity to large markets, referred to as ‘market potential’. The empirical part evaluates this market potential for all countries in the world with available trade data over the 1965–2003 period and relat…
Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States
Inter-City Competition for Foreign Investment: Static and Dynamic Effects of China's Incentive Areas
Immigration and Trade Creation: Econometric Evidence from Canada
Immigrants may expand trade with their country of origin, owing to superior knowledge of, or preferential access to, market opportunities. The authors test this proposition using Canadian trade data with 136 partners from 1980 to 1992. In an augmented gravity equation, they find that a 10 percent increase in immigrants is associated with a 1 percent increase in Canadian exports to the immigrant's home country and a 3 percent increase in imports. …
The Geographic Concentration of Fdi in Asia
Increasing Returns Versus National Product Differentiation as an Explanation for the Pattern of U.S.–Canada Trade
We evaluate two alternative models of international trade in differentiated products. An increasing returns model where varieties are linked to firms predicts home market effects: increases in a country's share of demand cause disproportionate increases in its share of output. In contrast, a constant returns model with national product differentiation predicts a less than proportionate increase. We examine a panel of U.S. and Canadian manufacturi…
Immigration and the Trade of Provinces
A link between immigration, imports, and exports has been found by a number of papers that have used the gravity equation to analyze bilateral trade patterns. We discuss what this research implies about the mechanisms through which immigrants expand trade and identify strengths and weakness of the various approaches. This paper also contributes to this literature by estimating immigrant effects for Canada using cross‐province variation in interna…
On the Pervasiveness of Home Market Effects
Paul Krugman’s model of trade predicts that the country with the relatively large number of consumers is the net exporter and hosts a disproportionate share of firms in the increasing returns sector. He terms these results ‘home market effects’. This paper analyses three additional models featuring increasing returns, firm mobility, and trade costs to assess the robustness of home market effects to alternative modelling assumptions. We find strik…
Market Potential and the Location of Japanese Investment in the European Union
This paper develops a theoretical model of location choice under imperfect competition to formalize the notion that firms prefer to\nlocate “where the markets are.” The profitability of a location depends on\na term that weights demand in all locations by accessibility. Using a sample of Japanese firms’ choices of regions within European countries, we compare the theoretically derived measure of market potential with the\nstandard form used by ge…
The Puzzling Persistence of the Distance Effect on Bilateral Trade
One of the best-established empirical results in international economics is that bilateral trade decreases with distance. Although well known, this result has not been systematically analyzed before. We examine 1,467 distance effects estimated in 103 papers. Information collected on each estimate allows us to test hypotheses about the causes of variation in the estimates. Our most interesting finding is that the estimated negative impact of dista…
How remote is the offshoring threat
Detection of Local Interactions From the Spatial Pattern of Names in France
Using data on the geographic distribution of names in France, we investigate the social transmission of parental preferences. Drawing on recent work on nonmarket interactions, we develop a linear discrete choice model that relates choices made in one location to those made in nearby areas. We explain the shares of parents that give their children Saint, Arabic, and American‐type names. We also examine the effect of distance between locations on d…
The erosion of colonial trade linkages after independence
Most independent nations today were part of empires in 1945. Using bilateral trade data from 1948 to 2006, we examine the effect of independence on post-colonial trade. While there is little short-run effect on trade, after four decades trade with the metropole (colonizer) has contracted by about 65%. Hostile separations lead to large, immediate reductions in trade. We also find that trade between former colonies of the same empire erodes as much…
Gravity, market potential and economic development
This article provides evidence on the long-term impact of market potential on economic development. It derives from the New Economic Geography literature a structural estimation where the level of factors' income of a country is related to its proximity to large markets, referred to as ‘market potential’. The empirical part evaluates this market potential for all countries in the world with available trade data over the 1965–2003 period and relat…
Quality Sorting and Trade: Firm-level Evidence for French Wine
Empirical investigation of the quality interpretation of the Melitz (2003) model of firm heterogeneity and trade has been limited by the lack of direct data on quality. This paper matches firm-level export data with expert assessments of the quality of champagne producers to estimate the key parameters of that model. Quality monotonically increases firm-level prices, the probability of market entry, and export values. The estimated model—which ca…
Gravity Equations: Workhorse,Toolkit, and Cookbook
The Economics of Cross-Border Travel
We model the decision to travel across an international border as a trade-off between benefits derived from buying a range of products at lower prices and the costs of travel. We estimate the model using microdata on Canada–United States travel. Price differences motivate cross-border travel; a 10% home appreciation raises the propensity to cross by 8% to 26%. The larger elasticity arises when the home currency is strong, a result predicted by th…
From Beijing to Bentonville: Do multinational retailers link markets
Summaries of Doctoral Dissertations
I was honored that Lee Alston asked me to be the convener for the Nevins Prize Competition this year. There were close to a dozen submissions spanning a
Geography, Ties, and Knowledge Flows: Evidence from Citations in Mathematics
Combining data on locations with career and educational histories of mathematicians, we study how distance and ties affect citation patterns. The ties considered include coauthorship, past colocation, and relationships mediated by advisers and the alma mater. With fixed effects capturing subject similarity and article quality, we find linkages are strongly associated with citation. Controlling for ties generally halves the negative impact of geog…
The United States of Europe: A Gravity Model Evaluation of the Four Freedoms
One of the pillars of the 1957 Treaty of Rome that ultimately led to the European Union is the commitment to the four freedoms of movement (goods, services, persons, and capital). Over the following decades, as the members expanded in numbers, they also sought to deepen the integration amongst themselves in all four dimensions. This paper estimates the success of these policies based primarily on a gravity framework. Distinct from past evaluation…
Poor Substitutes? Counterfactual Methods in Industrial Organization and Trade Compared
Constant elasticity of substitution (CES) demand for monopolistically competitive firm varieties is a standard tool for models in international trade and macroeconomics. Intervariety substitution in this model follows a simple share proportionality rule. In contrast, the standard tool kit in industrial organization (IO) estimates a system in which cross-elasticities depend on similarity in observable attributes. The gain in realism from the IO ap…
Economics (17 works) · Global trade and economics (15 works) · Computer Science (10 works) · Geography (7 works) · Econometrics (6 works) · International trade (6 works) · Microeconomics (6 works) · Political science (6 works) · Regional Economics and Spatial Analysis (5 works) · Business (4 works)