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Transportation uncertainty and international trade

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Author Info

  • Liu, Xiaoyun
  • Xin, Xian

Abstract

This paper uses a numerical framework to demonstrate that uncertainty in the arrival time of foreign goods can substantially reduce the demand for foreign goods. It further reveals that the impacts of falling transport costs and shipment time on international trade growth could be discounted, if uncertainty arises in the arrival time of the imported goods. This in turn suggests that reduced uncertainty, which is possibly the results of transportation improvements, might have contributed to the growth experienced in world trade growth over the past several decades. Thus, neglecting the roles of improvements in international transportation arrangements and reduced uncertainty will lead to underestimating the contribution of transportation improvements to trade growth.

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Bibliographic Info

Article provided by Elsevier in its journal Transport Policy.

Volume (Year): 18 (2011)
Issue (Month): 1 (January)
Pages: 156-162

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Handle: RePEc:eee:trapol:v:18:y:2011:i:1:p:156-162

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Related research

Keywords: Trade Uncertainty Transportation;

References

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  18. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
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  21. Thomas H. Klier, 1999. "Agglomeration in the U.S. auto supplier industry," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 18-34.
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