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A globally consistent framework for reliability-based trade statistics reconciliation in the presence of an entrepôt

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  • Wang, Zhi
  • Gehlhar, Mark
  • Yao, Shunli

Abstract

This paper develops a mathematical programming model to reconcile trade statistics subject to a set of global consistency conditions in the presence of an entrepôt. Initial data reliability serves a key function for governing the magnitude of adjustment. Through a two-stage optimization procedure, the adjusted trade statistics are achieved as solutions to a system of simultaneous equations that minimize a quadratic penalty function. As an empirical illustration, the model is applied to reconcile the 2004 trade statistics reported by China, Hong Kong and their major trading partners, initialized with detailed estimates of bilateral trade flows, re-export markups, cif/fob ratios and data reliability indexes.

Suggested Citation

  • Wang, Zhi & Gehlhar, Mark & Yao, Shunli, 2010. "A globally consistent framework for reliability-based trade statistics reconciliation in the presence of an entrepôt," China Economic Review, Elsevier, vol. 21(1), pages 161-189, March.
    • Handle: RePEc:eee:chieco:v:21:y:2010:i:1:p:161-189
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    4. Shaar, Karam & Baharumshah, Ahmad Zubaidi, 2016. "US-China trade: Who is telling the truth?," Working Paper Series 5146, Victoria University of Wellington, School of Economics and Finance.
    5. Shaar, Karam, 2017. "Reconciling International Trade Data," MPRA Paper 81572, University Library of Munich, Germany.
    6. Ferrantino, Michael J. & Liu, Xuepeng & Wang, Zhi, 2012. "Evasion behaviors of exporters and importers: Evidence from the U.S.–China trade data discrepancy," Journal of International Economics, Elsevier, vol. 86(1), pages 141-157.
    7. Defeng Zhang & Zhilu Sun, 2023. "The Impact of Agricultural Global Value Chain Participation on Agricultural Total Factor Productivity," Agriculture, MDPI, vol. 13(11), pages 1-20, November.
    8. Shaar, Karam, 2019. "Essays on modern economic issues in international trade, exchange rates and housing," Working Paper Series 8039, Victoria University of Wellington, School of Economics and Finance.

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