Estimating the Effects of the Container Revolution on World Trade
AbstractThe introduction of containerization triggered complementary technological and organizational changes that revolutionized global freight transport. Despite numerous claims about the importance of containerization in stimulating international trade, econometric estimates on the effects of containerization on trade appear to be missing. Our paper fills this gap in the literature. Our key idea is to exploit time and cross-sectional variation in countries’ adoption of port or railway container facilities to construct a time-varying bilateral technology variable and estimate its effect on explaining variations in bilateral product level trade flows in a large panel for the period 1962-1990. Our estimates suggest that containerization did not only stimulate trade in containerizable products (like auto parts) but also had complementary effects on non-containerizables (like automobiles). As expected, we find larger effects on North-North trade than on North-South or South-South trade and much smaller effects when ignoring railway containerization. Regarding North-North trade, the cumulative average treatment effects of containerization over a 20 year time period amount to about 700%, can be interpreted as causal, and are much larger than the effects of free trade agreements or the GATT. In a nutshell, we provide the first econometric evidence for containerization to be a driver of 20th century economic globalization.
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Bibliographic InfoPaper provided by Lund University, Department of Economics in its series Working Papers with number 2013:4.
Length: 34 pages
Date of creation: 15 Feb 2013
Date of revision:
Contact details of provider:
Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
More information through EDIRC
containerization; 20th century global transportation infrastructure;
Other versions of this item:
- Daniel Bernhofen & Zouheir El-Sahli & Richard Kneller, 2013. "Estimating The Effects of the Container Revolution on World Trade," Discussion Papers 2013-02, University of Nottingham, GEP.
- Daniel M. Bernhofen & Zouheir El-Sahli & Richard Kneller, 2013. "Estimating the Effects of the Container Revolution on World Trade," CESifo Working Paper Series 4136, CESifo Group Munich.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-02 (All new papers)
- NEP-HIS-2013-03-02 (Business, Economic & Financial History)
- NEP-INT-2013-03-02 (International Trade)
- NEP-TRE-2013-03-02 (Transport Economics)
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.:
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Containerization and world trade
by Economic Logician in Economic Logic on 2013-09-11 14:36:00
- New historical development papers on my desk
by Robin in Cherokee Gothic on 2013-04-18 13:00:05
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"Networks of Military Alliances, Wars, and International Trade,"
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dp1277, Centre for Economic Performance, LSE.
- Stephen J. Redding & Matthew A. Turner, 2014. "Transportation Costs and the Spatial Organization of Economic Activity," NBER Working Papers 20235, National Bureau of Economic Research, Inc.
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