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Shaky Roads and Trembling Exports: Assessing the Trade Effects of Domestic Infrastructure Using a Natural Experiment

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  • Christian Volpe Martincus
  • Juan S. Blyde

Abstract

Our knowledge of the trade effects of domestic infrastructure is very limited. The reason is twofold. First, data needed to examine these effects are not readily available. Second, identifying such effects requires properly addressing potential endogeneity problems affecting the relationship between internal infrastructure and trade. In this paper, we overcome these limitations by combining firm-level data with detailed geo-referenced information on Chile and by exploiting the earthquake that took place in this country in 2010 as an exogenous source of variation in available infrastructure and thereby in transport costs. We find that diminished transportation infrastructure had a significant negative impact on firms' exports.

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Bibliographic Info

Paper provided by Inter-American Development Bank in its series IDB Publications with number 82533.

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Date of creation: May 2012
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Handle: RePEc:idb:brikps:82533

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Keywords: Disasters; Trade Facilitation; Roads & Highways; Railways; Productivity; road infrastructure; product destination;

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Cited by:
  1. A. Kerem Cosar & Banu Demir, 2014. "Domestic Road Infrastructure and International Trade: Evidence from Turkey," Koç University-TUSIAD Economic Research Forum Working Papers, Koc University-TUSIAD Economic Research Forum 1406, Koc University-TUSIAD Economic Research Forum.
  2. Luis Castro & Ben Li & Keith E. Maskus & Yiqing Xie, 2014. "Fixed Export Costs and Export Behavior," CESifo Working Paper Series, CESifo Group Munich 4697, CESifo Group Munich.

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