Freight Rates and the Margins of Intra-Latin American Maritime Trade
AbstractThis paper focuses on the analysis of the relationship between maritime trade and transport cost in Latin America. The data available are disaggregated (SITC 5 digit level) maritime trade flows on trade routes within Latin America over the period 1999-2004. The contribution to the literature is to disentangle the effects that transport costs have on the extensive margin (number of products imported) and the intensive margin (quantity imported of each product) of international trade in order to test some of the predictions of the trade theories that introduce firm heterogeneity in productivity, as well as fixed costs of exporting. Recent investigations show that spatial frictions (distance) reduce trade mainly by reducing the number of shipments and that most firms ship only to geographically proximate customers, instead of shipping to many destinations in quantities that decrease in distance. Our findings confirm this result for intra-LA trade and show that the opposite pattern is observed for ad-valorem freight rates that reduce aggregate trade values mainly by reducing the quantity imported (intensive margin).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 201.
Length: 27 pages
Date of creation: 16 Feb 2010
Date of revision:
Contact details of provider:
Postal: Platz des Göttinger Sieben 3, 37073 Göttingen
Phone: 0049-551-39 81 72
Fax: 0049-551-39 81 73
Web page: http://www.iai.wiwi.uni-goettingen.de
More information through EDIRC
Transport costs; Maritime trade; Latin America; Sectoral data; Competitiveness;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gianmarco Ottaviano & Thierry Mayer, .
"The happy few: the internationalisation of European firms,"
Bruegel, number 12, December.
- Thierry Mayer & Gianmarco Ottaviano, 2008. "The Happy Few: The Internationalisation of European Firms," Intereconomics: Review of European Economic Policy, Springer, vol. 43(3), pages 135-148, May.
- James E. Anderson & Eric van Wincoop, 2004.
NBER Working Papers
10480, National Bureau of Economic Research, Inc.
- Hillberry, Russell & Hummels, David, 2008.
"Trade responses to geographic frictions: A decomposition using micro-data,"
European Economic Review,
Elsevier, vol. 52(3), pages 527-550, April.
- Russell Hillberry & David Hummels, 2005. "Trade Responses to Geographic Frictions: A Decomposition Using Micro-Data," NBER Working Papers 11339, National Bureau of Economic Research, Inc.
- Inmaculada Martinez-Zarzoso & Celestino Suarez-Burguet, 2005. "Transport costs and trade: Empirical evidence for Latin American imports from the European union," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(3), pages 353-371.
- David Hummels & Alexandre Skiba, 2004.
"Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture,"
Journal of Political Economy,
University of Chicago Press, vol. 112(6), pages 1384-1402, December.
- David Hummels & Alexandre Skiba, 2002. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," NBER Working Papers 9023, National Bureau of Economic Research, Inc.
- Ricardo J S�nchez & Jan Hoffmann & Alejandro Micco & Georgina V Pizzolitto & Mart�n Sgut & Gordon Wilmsmeier, 2003. "Port Efficiency and International Trade: Port Efficiency as a Determinant of Maritime Transport Costs," Maritime Economics and Logistics, Palgrave Macmillan, vol. 5(2), pages 199-218, June.
- Martínez-Zarzoso, Inmaculada & Nowak-Lehmann D., Felicitas, 2006.
"Is distance a good proxy for transport costs? The case of competing transport modes,"
Center for European, Governance and Economic Development Research Discussion Papers
54, University of Goettingen, Department of Economics.
- Inmaculada Martinez-Zarzoso & Felicitas D. Nowak-Lehmann, 2007. "Is distance a good proxy for transport costs? The case of competing transport modes," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(3), pages 411-434.
- Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
- I Mart�nez-Zarzoso & L Garc�a-Men�ndez & C Su�rez-Burguet, 2003. "Impact of Transport Costs on International Trade: The Case of Spanish Ceramic Exports," Maritime Economics and Logistics, Palgrave Macmillan, vol. 5(2), pages 179-198, June.
- Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
- Don P. Clark, 2007. "Distance, production, and trade," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(3), pages 359-371.
- Julia Spies & Joern Kleinert, 2011. "Transport Costs in International Trade," ERSA conference papers ersa11p625, European Regional Science Association.
- Joern Kleinert & Julia Spies, 2011. "Endogenous Transport Costs in International Trade," IAW Discussion Papers 74, Institut für Angewandte Wirtschaftsforschung (IAW).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Jaep).
If references are entirely missing, you can add them using this form.