Have developed countries escaped the curse of distance?
AbstractThere is widespread evidence that a better access to markets contributes to raising income levels. However, no quantification of the impact of distance to markets has been made on the basis of a sample restricted to advanced â and therefore more homogeneous â countries. This paper applies the framework developed by Redding and Venables (2004) on a panel data covering 21 OECD countries over 1970-2004, and shows that, relative to the average OECD country, the cost of remoteness for countries such as Australia and New Zealand could be as high as 10% of GDP. Conversely, the benefit for centrally-located countries like Belgium and the Netherlands could be around 6-7%. Second, the paper explains why the key estimated parameter in the Redding-Venables model is biased upwards in cross-section samples that mix both developing and developed countries, because of the inability to adequately control for heterogeneity in technology levels across countries. The paper also provides a detailed discussion of the links between the ?death-of-distance? hypothesis, the evolution of transport costs and that of the elasticity of trade to distance. Les pays dÃ©veloppÃ©s ont-ils Ã©chappÃ© Ã la malÃ©diction de la distance ? De nombreuses Ã©tudes empiriques ont montrÃ© quâun meilleur accÃ¨s aux marchÃ©s contribue Ã augmenter les revenus. Cependant, aucune quantification de lâimpact de la distance aux marchÃ©s nâa Ã©tÃ© effectuÃ©e Ã partir dâun Ã©chantillon homogÃ¨ne limitÃ© aux pays dÃ©veloppÃ©s. Ce papier applique le cadre dÃ©veloppÃ© par Redding and Venables (2004) Ã des donnÃ©es de panel couvrant 21 pays de lâOCDE entre 1970 et 2004, et montre que, relativement Ã la moyenne des pays de lâOCDE, le coÃ»t de lâÃ©loignement gÃ©ographique pour des pays comme lâAustralie et la Nouvelle ZÃ©lande sâÃ©lÃ¨ve Ã environ 10% de PIB. RÃ©ciproquement, le bÃ©nÃ©fice que tirent les pays ayant une position centrale comme la Belgique et les Pays-Bas serait de lâordre de 6-7%. De
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Bibliographic InfoArticle provided by Oxford University Press in its journal Journal of Economic Geography.
Volume (Year): 10 (2010)
Issue (Month): 1 (January)
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Other versions of this item:
- Hervé Boulhol & Alain de Serres, 2008. "Have Developed Countries Escaped the Curse of Distance?," OECD Economics Department Working Papers 610, OECD Publishing.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F15 - International Economics - - Trade - - - Economic Integration
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
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- Yotov, Yoto, 2012.
"A Simple Solution to the Distance Puzzle in International Trade,"
School of Economics Working Paper Series
2012-6, LeBow College of Business, Drexel University.
- Yotov, Yoto V., 2012. "A simple solution to the distance puzzle in international trade," Economics Letters, Elsevier, vol. 117(3), pages 794-798.
- Jordan Schwartz & José Luis Guasch & Gordon Wilmsmeier, 2009. "Logistics, Transport and Food Prices in LAC: Policy Guidance for Improving Efficiency and Reducing Costs," IDB Publications 9324, Inter-American Development Bank.
- Rafal Kierzenkowski, 2009. "The Challenge of Restoring French Competitiveness," OECD Economics Department Working Papers 720, OECD Publishing.
- Shekhar Aiyar & Romain A Duval & Damien Puy & Yiqun Wu & Longmei Zhang, 2013. "Growth Slowdowns and the Middle-Income Trap," IMF Working Papers 13/71, International Monetary Fund.
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