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The Origins of Spatial Interaction

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  • Keller, Wolfgang
  • Shiue, Carol Hua

Abstract

Geography shapes economic outcomes in a major way. This Paper uses spatial empirical methods to detect and analyse trade patterns in a historical dataset on Chinese rice prices. Our results suggest that spatial features were important for the expansion of interregional trade. Geography dictates, first, over what distances trade was possible in different regions, because the costs of ship transport were considerably below those for land transport. Spatial features also influence the direction in which a trading network is expanding. Moreover, our analysis captures the impact of new trade routes both within and outside the trading areas. We also discuss the long-run implications this might have.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4138.

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Date of creation: Dec 2003
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Handle: RePEc:cpr:ceprdp:4138

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Keywords: 18th century china; coastal transport; geography; R40; river transport; spatial autocorrelation; spatial econometrics; trade; transport costs;

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References

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Citations

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Cited by:
  1. Timo Mitze & Selin Özyurt, 2012. "The spatial dimension of trade- and FDI-driven productivity growth in Chinese provinces: A global cointegration approach," ERSA conference papers ersa12p512, European Regional Science Association.
  2. Lee, Lung-fei & Yu, Jihai, 2010. "Some recent developments in spatial panel data models," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 255-271, September.
  3. Carol H. Shiue & Wolfgang Keller, 2007. "Markets in China and Europe on the Eve of the Industrial Revolution," American Economic Review, American Economic Association, vol. 97(4), pages 1189-1216, September.
  4. Harry Garretsen & Jolanda Peeters, 2008. "FDI and the Relevance of Spatial Linkages: Do third Country Effects Matter for Dutch FDI?," CESifo Working Paper Series 2191, CESifo Group Munich.
  5. Robin Burgess & Dave Donaldson, 2012. "Can openness to trade reduce income volatility? Evidence from colonial India's famine era," LSE Research Online Documents on Economics 54255, London School of Economics and Political Science, LSE Library.
  6. Kukenova, Madina & Monteiro, Jose-Antonio, 2008. "Spatial Dynamic Panel Model and System GMM: A Monte Carlo Investigation," MPRA Paper 13405, University Library of Munich, Germany, revised Feb 2009.
  7. Parent, Olivier & LeSage, James P., 2012. "Spatial dynamic panel data models with random effects," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 727-738.
  8. Dave Donaldson, 2011. "Railroads of the Raj: estimating the impact of transportation infrastructure," LSE Research Online Documents on Economics 38368, London School of Economics and Political Science, LSE Library.
  9. Wolfgang Keller & Carol H. Shiue, 2004. "Market Integration and Economic Development: A Long-run Comparison," NBER Working Papers 10300, National Bureau of Economic Research, Inc.
  10. Bruce A. Blonigen & Ronald B. Davies & Glen R. Waddell & Helen T. Naughton, 2004. "FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment," NBER Working Papers 10939, National Bureau of Economic Research, Inc.
  11. A Salim, Ruhu & Mahfuz Kabir, Mohammad, 2011. "Does More Trade Potential Remain in Arab States of the Gulf ?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 26, pages 217-243.
  12. Yu, Jihai & de Jong, Robert & Lee, Lung-fei, 2012. "Estimation for spatial dynamic panel data with fixed effects: The case of spatial cointegration," Journal of Econometrics, Elsevier, vol. 167(1), pages 16-37.
  13. Irani Arraiz & David M. Drukker & Harry H. Kelejian & Ingmar R. Prucha, 2008. "A Spatial Cliff-Ord-type Model with Heteroskedastic Innovations: Small and Large Sample Results," CESifo Working Paper Series 2485, CESifo Group Munich.
  14. Harry Garretsen & Jolanda Peeters, 2009. "FDI and the relevance of spatial linkages: do third-country effects matter for Dutch FDI?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(2), pages 319-338, July.
  15. Harry Garretsen & Jolanda Peeters, 2007. "FDI and the Relevance of Spatial Linkages: do third country effects matter for Dutch FDI?," DNB Working Papers 162, Netherlands Central Bank, Research Department.

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