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A simple solution to the distance puzzle in international trade

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Author Info

  • Yotov, Yoto V.

Abstract

I propose a simple solution to the distance puzzle in international trade. Contrary to existing estimates of persistent or increasing distance effects on trade, I offer robust evidence that the impact of distance on trade has fallen steadily over time.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 117 (2012)
Issue (Month): 3 ()
Pages: 794-798

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Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:794-798

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Web page: http://www.elsevier.com/locate/ecolet

Related research

Keywords: Structural gravity; Distance puzzle; (Missing) globalization;

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References

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  1. Buch, Claudia M. & Kleinert, Jorn & Toubal, Farid, 2004. "The distance puzzle: on the interpretation of the distance coefficient in gravity equations," Economics Letters, Elsevier, vol. 83(3), pages 293-298, June.
  2. Thierry Mayer & Soledad Zignago, 2011. "Notes on CEPII’s distances measures: The GeoDist database," Working Papers 2011-25, CEPII research center.
  3. Anne-Célia Disdier & Keith Head, 2008. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 37-48, February.
  4. James E. Anderson & Yoto V. Yotov, 2012. "Gold Standard Gravity," Boston College Working Papers in Economics 795, Boston College Department of Economics.
  5. Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
  6. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2007. "Estimating Trade Flows: Trading Partners and Trading Volumes," NBER Working Papers 12927, National Bureau of Economic Research, Inc.
  7. James E. Anderson & Yoto V. Yotov, 2008. "The Changing Incidence of Geography," Boston College Working Papers in Economics 698, Boston College Department of Economics.
  8. Carrere, Celine & Schiff, Maurice, 2004. "On the geography of trade : distance is alive and well," Policy Research Working Paper Series 3206, The World Bank.
  9. Clément Bosquet & Hervé Boulhol, 2009. "Gravity, log of gravity and the "distance puzzle"," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00401386, HAL.
  10. Hervé Boulhol & Alain de Serres, 2008. "Have Developed Countries Escaped the Curse of Distance?," OECD Economics Department Working Papers 610, OECD Publishing.
  11. de Sousa, José, 2012. "The currency union effect on trade is decreasing over time," Economics Letters, Elsevier, vol. 117(3), pages 917-920.
  12. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
  13. Jean-François BRUN & Céline CARRERE & Patrick GUILLAUMONT & Jaime MELO DE, 2002. "Has Distance Died? Evidence from a Panel Gravity Model," Working Papers 200215, CERDI.
  14. Lin, Faqin & Sim, Nicholas C.S., 2012. "Death of distance and the distance puzzle," Economics Letters, Elsevier, vol. 116(2), pages 225-228.
  15. Larch, Mario & Norbäck, Pehr-Johan & Sirries, Steffen & Urban, Dieter, 2013. "Heterogeneous Firms, Globalization and the Distance Puzzle," Working Paper Series 957, Research Institute of Industrial Economics.
  16. Rikhil Bhavnani & Natalia T. Tamirisa & Arvind Subramanian & David T. Coe, 2002. "The Missing Globalization Puzzle," IMF Working Papers 02/171, International Monetary Fund.
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Citations

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Cited by:
  1. Jeffrey H., Larch, Mario Bergstrand & Yoto V. Yotov, 2013. "Economic Integation Agreements, Border Effects, and Distance Elasticities in the Gravity Equation," CESifo Working Paper Series 4502, CESifo Group Munich.
  2. Larch, Mario & Norbäck, Pehr-Johan & Sirries, Steffen & Urban, Dieter, 2013. "Heterogeneous Firms, Globalization and the Distance Puzzle," Working Paper Series 957, Research Institute of Industrial Economics.
  3. Juyoung Cheong & Do Won Kwak & Kam Ki Tang, 2013. "The Distance Effects on the Intensive and Extensive Margins of Trade Over Time," Discussion Papers Series 488, School of Economics, University of Queensland, Australia.
  4. Riccardo Chiarucci & Franco Ruzzenenti & Maria I. Loffredo, 2013. "Detecting spatial homogeneity in the world trade web with Detrended Fluctuation Analysis," Papers 1308.0526, arXiv.org, revised Nov 2013.
  5. De Sousa, Jose, 2011. "The currency union effect on trade is decreasing over time," MPRA Paper 35448, University Library of Munich, Germany.

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