Economics

This dissertation consisits of two chapters. Both chapters relate to the effects of trade resistence measures commonly used in the International Trade literature. The first chapter investigates the effects of trade costs on the extensive and intensive margins of trade. The second chapter uses a semi-nonparametric estimation technique to include zero trade trade values and adds additional flexibility to the estimation of trade costs. Trade literature has made use of the gravity equation since its introduction by Tinbergen (1962) to measure the impact of trade barriers and country characteristics on bilateral trade flows. The new focus of the literature separates international trade into two separate components: 1) the extensive margin which describe the variety of products exported, and 2) the intensive margin which describes the volume of each variety exported. Research using the traditional gravity equation inherently assumes that for any change in trade cost only affects the intensive margin or variable costs. Industry level data is used to construct a modified gravity specification that allow