Export supply and import demand functions of Hong Kong : a dual production theory approach
Export supply and import demand functions of Hong Kong : a dual production theory approach
The focus of this study is the modelling of the trade functions of Hong Kong. Since the Hong Kong manufacturing sector imports all its materials inputs, exports over 90 percent of its outputs, and is free of government intervention, it is relatively straightforward to derive the export supply and import demand functions of Hong Kong. The ease of obtaining these trade functions contributes to two important areas of research in international trade:-
(i) Most studies of export functions deal exclusively with the demand-side determinants of exports with little attention paid to the supply side of exports. Therefore this study models both the supply and demand functions of Hong Kong domestic exports within a multivariate framework using the recent econometric methodology comprising cointegration and general-to-specific strategy.
(ii) Most studies of trade functions lack an underlying model of optimal behaviour. This study models the Hong Kong manufacturer as a firm in the international economy using the producer theory within a profit-maximising framework, thus providng a sound theoretical underpinning for the export supply and import demand functions. This study derives the trade functions of the Hong Kong producer from the variable profit function, a dual representation of technology, and estimates the set of export supply and import demand functions as a system of equations. The joint estimation produces efficient estimates and ensures that the functions are consistent with the underlying technology.
Based on the estimated trade functions, we can obtain various trade elasticities which yield useful insights into the responsiveness of Hong Kong's exports and imports to changes in export and import prices.
University of Southampton
1993
Ho, To Ming
(1993)
Export supply and import demand functions of Hong Kong : a dual production theory approach.
University of Southampton, Doctoral Thesis.
Record type:
Thesis
(Doctoral)
Abstract
The focus of this study is the modelling of the trade functions of Hong Kong. Since the Hong Kong manufacturing sector imports all its materials inputs, exports over 90 percent of its outputs, and is free of government intervention, it is relatively straightforward to derive the export supply and import demand functions of Hong Kong. The ease of obtaining these trade functions contributes to two important areas of research in international trade:-
(i) Most studies of export functions deal exclusively with the demand-side determinants of exports with little attention paid to the supply side of exports. Therefore this study models both the supply and demand functions of Hong Kong domestic exports within a multivariate framework using the recent econometric methodology comprising cointegration and general-to-specific strategy.
(ii) Most studies of trade functions lack an underlying model of optimal behaviour. This study models the Hong Kong manufacturer as a firm in the international economy using the producer theory within a profit-maximising framework, thus providng a sound theoretical underpinning for the export supply and import demand functions. This study derives the trade functions of the Hong Kong producer from the variable profit function, a dual representation of technology, and estimates the set of export supply and import demand functions as a system of equations. The joint estimation produces efficient estimates and ensures that the functions are consistent with the underlying technology.
Based on the estimated trade functions, we can obtain various trade elasticities which yield useful insights into the responsiveness of Hong Kong's exports and imports to changes in export and import prices.
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Published date: 1993
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Local EPrints ID: 462447
URI: http://eprints.soton.ac.uk/id/eprint/462447
PURE UUID: 864aac8f-c3d6-499a-9b4c-aa7329f1fb04
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Date deposited: 04 Jul 2022 19:08
Last modified: 04 Jul 2022 19:08
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Author:
To Ming Ho
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