CEPII, Recherche et Expertise sur l'economie mondiale
The Euro and the Intensive and Extensive Margins of Trade: Evidence from French Firm Level Data

Antoine Berthou
Lionel Fontagné

 Highlights :

 Abstract :
We improve the study of the effects of a Currency Union on trade. Using data on French exports at the firm level, we compute an intensive and extensive margins of French exports - with a variety dimension - over the period 1998-2003. Estimation results indicate that nominal exchange rate volatility has a negative effect, which translates into the intensive and extensive margins. We also provide some evidence that the euro had an additional positive effect on the extensive margin; this effect is not related to the reduced nominal exchange rate volatility. This suggests a new varieties effect of the euro.

 Keywords : Trade | Export margins | Euro

 JEL : F10, F15
CEPII Working Paper
N°2008-06, April 2008

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 Fields of expertise

Trade & Globalization