The path of export variety and terms of trade

The path of export variety (extensive margin): theory and evidence. It has been evident that new products and export varieties have played an important role in export and economic growth. Thus this paper develops a well-specified model with monopolistic competition and fixed entry cost in order to explain the mechanism that generates the difference and expansion of export variety and destination. To provide evidence the paper builds a new measurement that compares the export varieties from a country to many trading partners. The empirical results show that countries export more varieties to higher income economies. In addition, the finding that the correlation between destination income and the extensive margin has been reduced over time suggests that other forces such as trade liberalization and learning effect have played an intensified role on the increasing trend in the extensive margin. The paper is providing evidence of the importance of the extensive margin in international trade and monopolistic competition model.; Export variety and terms of trade: theory and evidence. The international trade models predict "immizerizing growth" in which economic growth induces adverse terms of trade. The East Asian countries have recorded sustainable economic and export growth, and their terms of trade have been deteriorating over the last decades. This paper shows that the countries, especially Korea, have avoided adverse terms of trade effects through increasing export variety. The decreasing exporting price effect has been avoided by increasing export variety. Growing countries may export more varieties to avoid a decreasing export price.; Finding the order of export destination and product. This paper shows "Export Destination Cycle"---there is an order of export destinations and "Export Product Cycle"---there is an order of export products. There are many destination countries to which many commodities are not exported from a source country. The "semi-parametric" method is suggested because of the locally available data set. The meaningful measurement, considering non-randomly missing data, is highly correlated with the extensive and intensive margin, and the per capita GDP or GDP in the destinations. The findings suggest that the destination countries to which products are earlier exported tend to have more variety and large quantity as well as volume, and the new commodities produced by a country are first exported to high income countries and then the others with relatively low income.