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Exports and International Logistics

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  • Alberto Behar
  • Philip Manners
  • Benjamin D. Nelson

Abstract

Do better international logistics reduce trade costs, raising a developing country's exports? Yes, but the magnitude of the effect depends on the country's size. The authors apply a gravity model that accounts for firm heterogeneity and multilateral resistance to a comprehensive new international logistics index. A one-standard deviation improvement in logistics is equivalent to a 14 percent reduction in distance. An average-sized developing country would raise exports by about 36 percent. Most countries are much smaller than average however, so the typical effect is 8 percent. This difference is chiefly due to multilateral resistance: it is bilateral trade costs relative to multilateral trade costs that matter for bilateral exports, and multilateral resistance is more important for small countries.

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Bibliographic Info

Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.

Volume (Year): 75 (2013)
Issue (Month): 6 (December)
Pages: 855-886

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Handle: RePEc:bla:obuest:v:75:y:2013:i:6:p:855-886

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  1. Mélitz, Jacques, 2002. "Language and Foreign Trade," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3590, C.E.P.R. Discussion Papers.
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  4. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, American Economic Association, vol. 85(3), pages 615-23, June.
  5. Alberto Behar & Benjamin D. Nelson, 2014. "Trade Flows, Multilateral Resistance, and Firm Heterogeneity," The Review of Economics and Statistics, MIT Press, vol. 96(3), pages 538-549, July.
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  8. Tony Venables & Alberto Behar, 2010. "Transport Costs and International Trade," Economics Series Working Papers 488, University of Oxford, Department of Economics.
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Cited by:
  1. Alberto Behar & Benjamin D. Nelson, 2012. "Trade Flows, Multilateral Resistance, and Firm Heterogeneity," IMF Working Papers 12/297, International Monetary Fund.
  2. Murat Genç & David Law, 2014. "A Gravity Model of Barriers to Trade in New Zealand," Treasury Working Paper Series 14/05, New Zealand Treasury.
  3. Saslavsky, Daniel & Shepherd, Ben, 2012. "Facilitating international production networks : the role of trade logistics," Policy Research Working Paper Series 6224, The World Bank.

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