Distance Sensitivity of Export: A Firm-Product Level Approach
AbstractRecent literature suggests that the extent to which exports of a product is influenced by distance depends on the product characteristics. Differentiated products with non-standardised attributes are typically claimed to be more distance-sensitive as transactions should involve interactions between buyers and sellers. But the empirical evidence still finds conflicting results. Previous studies have examined the effect of distance on export values across different product groups. This paper employs a gravity model on Swedish firm-product level export data to analyse the effect of distance on the export decisions as well as export values, respectively. The focus is on how the influence of distance varies across differentiated and non-differentiated products. For both export participation and intensity decisions, the results are not in line with the network/search view and suggest that homogeneous products are more sensitive to distance than differentiated products when controlling for annual shocks and industry heterogeneity. Moreover, I find evidence of a learning effect from past trade experience.
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Bibliographic InfoPaper provided by The Ratio Institute in its series Ratio Working Papers with number 220.
Length: 29 pages
Date of creation: 01 Oct 2013
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distance sensitivity; export decisions; gravity model; firmproduct level; micro-data;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
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- Davidson, Carl & Heyman, Fredrik & Matusz, Steven & Sjöholm, Fredrik & Zhu, Susan Chun, 2014.
"Global Engagement and the Occupational Structure of Firms,"
2014:22, Lund University, Department of Economics.
- Heyman, Fredrik & Sjöholm, Fredrik & Davidson, Carl & Matusz, Steven & Chun Zhu, Susan, 2014. "Global Engagement and the Occupational Structure of Firms," Working Paper Series 1026, Research Institute of Industrial Economics.
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