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

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  • Cecília Hornok

Abstract

Timeliness has gained growing importance in international trade. This paper provides empirical evidence on the significant cost of time in trade by exploiting the quasi-experimental nature of the European Union (EU) enlargement in 2004. It applies a difference-in-difference-in-differences econometric strategy on a European industry-level database of bilateral trade barriers, where industries are differentiated according to their time sensitivity. The use of a treatment intensity indicator that captures the decline in the waiting time at borders supports the identification. Results are cross-checked on subsamples defined along transport mode choice probabilities, where intra-EU transport mode choice projections are obtained from an estimated discrete choice model on extra-EU trade. Robustness checks experiment with alternative definitions of treatment sensitivity and treatment intensity.

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Bibliographic Info

Paper provided by The Vienna Institute for International Economic Studies, wiiw in its series wiiw Working Papers with number 75.

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Length: 38 pages including 20 Tables and 6 Figures
Date of creation: Apr 2011
Date of revision:
Publication status: Published as wiiw Working Paper
Handle: RePEc:wii:wpaper:75

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Related research

Keywords: time cost of trade; difference-in-difference-in-differences estimation; treatment intensity; EU enlargement; transport mode choice;

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References

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  1. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, American Economic Association, vol. 98(4), pages 1707-21, September.
  2. Natalie Chen & Dennis Novy, 2009. "International trade integration: a disaggregated approach," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 28516, London School of Economics and Political Science, LSE Library.
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  7. Emanuele Breda & Rita Cappariello & Roberta Zizza, 2008. "Vertical specialisation in Europe: Evidence from the import content of exports," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 682, Bank of Italy, Economic Research and International Relations Area.
  8. Dennis Novy, 2012. "Gravity Redux: Measuring International Trade Costs with Panel Data," CEP Discussion Papers dp1114, Centre for Economic Performance, LSE.
  9. Carolyn L. Evans & James Harrigan, 2003. "Distance, Time, and Specialization," NBER Working Papers 9729, National Bureau of Economic Research, Inc.
  10. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, American Economic Association, vol. 93(1), pages 170-192, March.
  11. Cecília Hornok, 2010. "Trade-Enhancing EU Enlargement and the Resurgence of East-East Trade," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 79-94.
  12. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
  13. David S. Jacks & Christopher M. Meissner & Dennis Novy, 2008. "Trade Costs, 1870-2000," American Economic Review, American Economic Association, American Economic Association, vol. 98(2), pages 529-34, May.
  14. Harrigan, James & Venables, Anthony J., 2006. "Timeliness and agglomeration," Journal of Urban Economics, Elsevier, vol. 59(2), pages 300-316, March.
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Cited by:
  1. Cecília Hornok & Miklós Koren, 2011. "Lumpy Trade and the Welfare Effects of Administrative Barriers," CeFiG Working Papers, Center for Firms in the Global Economy 14, Center for Firms in the Global Economy, revised 22 Sep 2011.
  2. Cecília Hornok, 2011. "Gravity or Dummies? The Limits of Identification in Gravity Estimations," CeFiG Working Papers, Center for Firms in the Global Economy 15, Center for Firms in the Global Economy, revised 26 Sep 2011.
  3. Demian Calin-Vlad, 2013. "Eu enlargement and the gains from trade," FIW Working Paper series, FIW 108, FIW.
  4. Cecília Hornok & Miklós Koren, 2011. "Administrative Barriers and the Lumpiness of Trade," CEU Working Papers, Department of Economics, Central European University 2012_6, Department of Economics, Central European University, revised 01 Sep 2011.

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