On the Conservation of Distance in International Trade
The volume of world trade has grown more than twice as fast as real world income since 1980. Surprisingly, the effect of distance on trade has increased during this period. It could be that countries are trading greater volumes of goods that are hi...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/05/4270411/conservation-distance-international-trade http://hdl.handle.net/10986/13888 |
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okr-10986-138882021-04-23T14:03:20Z On the Conservation of Distance in International Trade Berthelon, Matias Freund, Caroline AGGREGATE TRADE AVERAGE TRADE BENCHMARK BILATERAL TRADE BILATERAL TRADE DATA CHANGES IN TRADE CIF COMMODITIES COMPARATIVE ADVANTAGE CONTAINERIZATION CUSTOMS ECONOMIC GEOGRAPHY ELASTICITIES ELASTICITY ELASTICITY OF TRADE EMPIRICAL INVESTIGATIONS EXCHANGE RATE EXPORT SUPPLY EXPORTS FOREIGN MARKETS FREE TRADE FREE TRADE AGREEMENTS FUELS GRAVITY EQUATION GRAVITY ESTIMATES GRAVITY MODEL GRAVITY MODELS IDIOSYNCRATIC SHOCKS IMPACT OF TRADE IMPORTS INCOME INTERNATIONAL TRADE INTERNATIONAL TRANSPORT MACROECONOMICS MARKET STRUCTURE NATURAL RESOURCES OPENNESS PATTERN OF TRADE PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PRODUCTION COSTS REAL GDP REGIONALISM REGIONALIZATION TECHNOLOGICAL CHANGE TRADE COSTS TRADE FLOWS TRADE PARTNERS TRADE POLICY TRADING BLOCS TRANSACTIONS COSTS TRANSPORT COSTS VERTICAL SPECIALIZATION VOLUME OF TRADE WORLD TRADE The volume of world trade has grown more than twice as fast as real world income since 1980. Surprisingly, the effect of distance on trade has increased during this period. It could be that countries are trading greater volumes of goods that are highly sensitive to distance. An alternative explanation is that distance has become more import for a significant share of goods. Using highly disaggregated bilateral trade data, the authors find that adjustment in the composition of trade has not influenced the way in which distance affects trade. In contrast, for about 25 percent of industries, distance has become more important. This implies that the increased distance sensitivity of trade is a result of a change in relative trade costs that affects many industries, as opposed to a shift to more distance-sensitive products. The authors also find that homogeneous products are twice as likely to have become more distance sensitive as compared with differentiated goods. This is consistent with the hypothesis that falling search costs, resulting from improvements in transport and communications, are relatively more important for differentiated goods. The results offer no evidence of the "death of distance." Rather, they suggest that distance-related relative trade costs have remained unchanged or shifted in favor of proximate markets. 2013-06-12T22:50:41Z 2013-06-12T22:50:41Z 2004-05 http://documents.worldbank.org/curated/en/2004/05/4270411/conservation-distance-international-trade http://hdl.handle.net/10986/13888 English en_US Policy Research Working Paper;No. 3293 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGGREGATE TRADE AVERAGE TRADE BENCHMARK BILATERAL TRADE BILATERAL TRADE DATA CHANGES IN TRADE CIF COMMODITIES COMPARATIVE ADVANTAGE CONTAINERIZATION CUSTOMS ECONOMIC GEOGRAPHY ELASTICITIES ELASTICITY ELASTICITY OF TRADE EMPIRICAL INVESTIGATIONS EXCHANGE RATE EXPORT SUPPLY EXPORTS FOREIGN MARKETS FREE TRADE FREE TRADE AGREEMENTS FUELS GRAVITY EQUATION GRAVITY ESTIMATES GRAVITY MODEL GRAVITY MODELS IDIOSYNCRATIC SHOCKS IMPACT OF TRADE IMPORTS INCOME INTERNATIONAL TRADE INTERNATIONAL TRANSPORT MACROECONOMICS MARKET STRUCTURE NATURAL RESOURCES OPENNESS PATTERN OF TRADE PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PRODUCTION COSTS REAL GDP REGIONALISM REGIONALIZATION TECHNOLOGICAL CHANGE TRADE COSTS TRADE FLOWS TRADE PARTNERS TRADE POLICY TRADING BLOCS TRANSACTIONS COSTS TRANSPORT COSTS VERTICAL SPECIALIZATION VOLUME OF TRADE WORLD TRADE |
| spellingShingle |
AGGREGATE TRADE AVERAGE TRADE BENCHMARK BILATERAL TRADE BILATERAL TRADE DATA CHANGES IN TRADE CIF COMMODITIES COMPARATIVE ADVANTAGE CONTAINERIZATION CUSTOMS ECONOMIC GEOGRAPHY ELASTICITIES ELASTICITY ELASTICITY OF TRADE EMPIRICAL INVESTIGATIONS EXCHANGE RATE EXPORT SUPPLY EXPORTS FOREIGN MARKETS FREE TRADE FREE TRADE AGREEMENTS FUELS GRAVITY EQUATION GRAVITY ESTIMATES GRAVITY MODEL GRAVITY MODELS IDIOSYNCRATIC SHOCKS IMPACT OF TRADE IMPORTS INCOME INTERNATIONAL TRADE INTERNATIONAL TRANSPORT MACROECONOMICS MARKET STRUCTURE NATURAL RESOURCES OPENNESS PATTERN OF TRADE PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PRODUCTION COSTS REAL GDP REGIONALISM REGIONALIZATION TECHNOLOGICAL CHANGE TRADE COSTS TRADE FLOWS TRADE PARTNERS TRADE POLICY TRADING BLOCS TRANSACTIONS COSTS TRANSPORT COSTS VERTICAL SPECIALIZATION VOLUME OF TRADE WORLD TRADE Berthelon, Matias Freund, Caroline On the Conservation of Distance in International Trade |
| relation |
Policy Research Working Paper;No. 3293 |
| description |
The volume of world trade has grown more
than twice as fast as real world income since 1980.
Surprisingly, the effect of distance on trade has increased
during this period. It could be that countries are trading
greater volumes of goods that are highly sensitive to
distance. An alternative explanation is that distance has
become more import for a significant share of goods. Using
highly disaggregated bilateral trade data, the authors find
that adjustment in the composition of trade has not
influenced the way in which distance affects trade. In
contrast, for about 25 percent of industries, distance has
become more important. This implies that the increased
distance sensitivity of trade is a result of a change in
relative trade costs that affects many industries, as
opposed to a shift to more distance-sensitive products. The
authors also find that homogeneous products are twice as
likely to have become more distance sensitive as compared
with differentiated goods. This is consistent with the
hypothesis that falling search costs, resulting from
improvements in transport and communications, are relatively
more important for differentiated goods. The results offer
no evidence of the "death of distance." Rather,
they suggest that distance-related relative trade costs have
remained unchanged or shifted in favor of proximate markets. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Berthelon, Matias Freund, Caroline |
| author_facet |
Berthelon, Matias Freund, Caroline |
| author_sort |
Berthelon, Matias |
| title |
On the Conservation of Distance in International Trade |
| title_short |
On the Conservation of Distance in International Trade |
| title_full |
On the Conservation of Distance in International Trade |
| title_fullStr |
On the Conservation of Distance in International Trade |
| title_full_unstemmed |
On the Conservation of Distance in International Trade |
| title_sort |
on the conservation of distance in international trade |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2004/05/4270411/conservation-distance-international-trade http://hdl.handle.net/10986/13888 |
| _version_ |
1764430336684457984 |