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Export performance and trade facilitation reform : hard and soft infrastructure

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  • Portugal-Perez, Alberto
  • Wilson, John S.

Abstract

The authors estimate the impact of aggregate indicators of"soft"and"hard"infrastructure on the export performance of developing countries. They build four new indicators for 101 countries over the period 2004-07. Estimates show that trade facilitation reforms do improve the export performance of developing countries. This is particularly true with investment in physical infrastructure and regulatory reform to improve the business environment. Moreover, the findings provide evidence that the marginal effect of infrastructure improvement on exports appears to be decreasing in per capita income. In contrast, the impact of information and communications technology on exports appears increasingly important for richer countries. Drawing on estimates, the authors compute illustrative exports growth for developing countries and ad-valorem equivalents of improving each indicator halfway to the level of the top performer in the region. As an example, improving the quality of physical infrastructure so that Egypt's indicator increases half-way to the level of Tunisia would increase exports by 10.8 percent. This is equivalent to a 7.4 percent cut in tariffs faced by Egyptian exporters across importing markets.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5261.

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Date of creation: 01 Apr 2010
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Handle: RePEc:wbk:wbrwps:5261

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Keywords: Environmental Economics&Policies; Transport Economics Policy&Planning; Free Trade; Economic Theory&Research; Trade Policy;

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  1. Djankov, Simeon & Freund, Caroline & Pham, Cong S., 2006. "Trading on time," Policy Research Working Paper Series 3909, The World Bank.
  2. J.C.M. Santos Silva & Silvana Tenreyro, 2011. "poisson: Some convergence issues," Economics Discussion Papers 695, University of Essex, Department of Economics.
  3. Ximena Clark & David Dollar & Alejandro Micco, 2004. "Port Efficiency, Maritime Transport Costs and Bilateral Trade," NBER Working Papers 10353, National Bureau of Economic Research, Inc.
  4. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  5. 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.
  6. John S. Wilson & Catherine L. Mann & Tsunehiro Otsuki, 2003. "Trade Facilitation and Economic Development: A New Approach to Quantifying the Impact," World Bank Economic Review, World Bank Group, vol. 17(3), pages 367-389, December.
  7. Helble, Matthias & Mann, Catherine & Wilson, John S., 2009. "Aid for trade facilitation," Policy Research Working Paper Series 5064, The World Bank.
  8. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
  9. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
  10. Alberto Behar & Benjamin D. Nelson, 2009. "Exports and Logistics," Economics Series Working Papers 439, University of Oxford, Department of Economics.
  11. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2007. "Estimating Trade Flows: Trading Partners and Trading Volumes," NBER Working Papers 12927, National Bureau of Economic Research, Inc.
  12. Ferro, Esteban & Portugal-Perez, Alberto & Wilson, John S., 2011. "Aid to the services sector : does it affect manufacturing exports ?," Policy Research Working Paper Series 5728, The World Bank.
  13. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
  14. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Boston College Working Papers in Economics 593, Boston College Department of Economics.
  15. John S. Wilson & Catherine L. Mann & Tsunehiro Otsuki, 2005. "Assessing the Benefits of Trade Facilitation: A Global Perspective," The World Economy, Wiley Blackwell, vol. 28(6), pages 841-871, 06.
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Citations

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Cited by:
  1. Francois, Joseph & Manchin, Miriam, 2007. "Institutions, infrastructure, and trade," Policy Research Working Paper Series 4152, The World Bank.
  2. Celbis, Mehmet Güney & Nijkamp, Peter & Poot, Jacques, 2013. "How big is the impact of infrastructure on trade? Evidence from meta-analysis," MERIT Working Papers 032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. Hoekstra, Ruth, 2013. "Boosting Manufacturing Firms' Exports? The role of trade facilitation in Africa," IEE Working Papers 197, Institut fuer Entwicklungsforschung und Entwicklungspolitik, Ruhr-Universitaet Bochum.
  4. Cadot, Olivier & Fernandes, Ana M. & Gourdon, Julien & Mattoo, Aaditya, 2011. "Impact evaluation of trade interventions : paving the way," Policy Research Working Paper Series 5877, The World Bank.
  5. Velea, Irina & Cadot, Olivier & Wilson, John S., 2010. "Do private inspection programs affect trade facilitation ?," Policy Research Working Paper Series 5515, The World Bank.
  6. Jaime de MELO & Yvonne TSIKATA, 2014. "Regional integration in Africa: Challenges and prospects," Working Papers P93, FERDI.
  7. Guillermo Perry, 2013. "Regional Public Goods in Finance, Trade and Infrastructure," DOCUMENTOS CEDE 011888, UNIVERSIDAD DE LOS ANDES-CEDE.
  8. Alberto Behar & Philip Manners & Benjamin D. Nelson, 2013. "Exports and International Logistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 855-886, December.
  9. Saslavsky, Daniel & Shepherd, Ben, 2012. "Facilitating international production networks : the role of trade logistics," Policy Research Working Paper Series 6224, The World Bank.
  10. Jan Hanousek & Evžen Kočenda, 2013. "Factors of trade in Europe," Working Papers 333, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  11. Juyoung Cheong & Do Won Kwak & Kam Ki Tang, 2013. "WTO Trade Effects and Identification Problems: Why Knowing The Structural Properties of WTO Memberships Matters?," Discussion Papers Series 491, School of Economics, University of Queensland, Australia.
  12. Hoekman, Bernard & Wilson, John S., 2010. "Aid for trade : building on progress today for tomorrow's future," Policy Research Working Paper Series 5361, The World Bank.

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