Advanced Search
MyIDEAS: Login

Need for Speed: Is Faster Trade in the EU Trade-creating?

Contents:

Author Info

  • Cecília Hornok

    () (Central European University)

Abstract

Timely deliveries have become more important in international trade in the recent decades, mostly because of the spread of international production fragmentation. This paper provides empirical evidence on the cost of time in trade by looking at how faster trade within the European Union (EU) contributed to the trade expansion with new EU members after the enlargement in 2004. I derive a bilateral trade cost index from trade data of EU countries in 19 manufacturing industries and years 2000–2006 and perform a double difference-in-differences estimation. The results show that the enlargement-induced decline in the trade cost index, and hence trade creation, was more than twice larger in industries, where production fragmentation is typically widespread. I proxy the improvement in timeliness by the decline in the waiting time at land border crossings and estimate that saving one hour at the border is like a 0.9% trade cost decline in ad valorem terms. Robustness checks, which account for the dominant transport mode or experiment with alternative measures of timeliness, confirm the main findings.

Download Info

If 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.
File URL: http://english.mnb.hu/Root/Dokumentumtar/ENMNB/Kiadvanyok/mnben_mnbfuzetek/WP_2012-04.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Magyar Nemzeti Bank (the central bank of Hungary) in its series MNB Working Papers with number 2012/4.

as in new window
Length: 40 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:mnb:wpaper:2012/4

Contact details of provider:
Web page: http://www.mnb.hu/
More information through EDIRC

Related research

Keywords: time cost of trade; double difference-in-differences; treatment intensity; EU enlargement;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Dennis Novy, 2012. "Gravity Redux: Measuring International Trade Costs with Panel Data," CEP Discussion Papers dp1114, Centre for Economic Performance, LSE.
  2. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  3. James Harrigan & Carolyn Evans, 2004. "Distance, Time and Specialization," Econometric Society 2004 North American Winter Meetings 640, Econometric Society.
  4. Jacks, David S; Meissner, Christopher; Novy, Dennis, 2010. "Trade Booms, Trade Busts and Trade Costs," CAGE Online Working Paper Series 33, Competitive Advantage in the Global Economy (CAGE).
  5. 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.
  6. Natalie Chen & Dennis Novy, 2009. "International Trade Integration: A Disaggregated Approach," CEP Discussion Papers dp0908, Centre for Economic Performance, LSE.
  7. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Boston College Working Papers in Economics 593, Boston College Department of Economics.
  8. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc.
  9. Harrigan, James & Venables, Anthony J., 2006. "Timeliness and agglomeration," Journal of Urban Economics, Elsevier, vol. 59(2), pages 300-316, March.
  10. Emanuele Breda & Rita Cappariello & Roberta Zizza, 2008. "Vertical specialisation in Europe: Evidence from the import content of exports," Temi di discussione (Economic working papers) 682, Bank of Italy, Economic Research and International Relations Area.
  11. Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," NBER Working Papers 11393, National Bureau of Economic Research, Inc.
  12. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
  13. Marc J. Melitz & Giancarlo I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity," Review of Economic Studies, Wiley Blackwell, vol. 75(1), pages 295-316, 01.
  14. Cecília Hornok, 2010. "Trade-Enhancing EU Enlargement and the Resurgence of East-East Trade," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 79–94, August.
  15. David S. Jacks & Christopher M. Meissner & Dennis Novy, 2008. "Trade Costs, 1870-2000," American Economic Review, American Economic Association, vol. 98(2), pages 529-34, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Cecília Hornok, 2012. "Gravity or Dummies? The Limits of Identification in Gravity Estimations," CEU Working Papers 2012_11, Department of Economics, Central European University, revised 20 May 2012.
  2. Cecília Hornok & Miklós Koren, 2011. "Lumpy Trade and the Welfare Effects of Administrative Barriers," CeFiG Working Papers 14, Center for Firms in the Global Economy, revised 22 Sep 2011.
  3. Cecília Hornok & Miklós Koren, 2011. "Administrative Barriers and the Lumpiness of Trade," CEU Working Papers 2012_6, Department of Economics, Central European University, revised 01 Sep 2011.
  4. Demian Calin-Vlad, 2013. "Eu enlargement and the gains from trade," FIW Working Paper series 108, FIW.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mnb:wpaper:2012/4

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Johanna Jeney).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.