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Exports and International Logistics

  • Alberto Behar
  • Philip Manners
  • Benjamin D. Nelson

Do better international logistics reduce trade costs, raising a developing country's exports? Yes, but the magnitude of the effect depends on the country's size. The authors apply a gravity model that accounts for firm heterogeneity and multilateral resistance to a comprehensive new international logistics index. A one-standard deviation improvement in logistics is equivalent to a 14 percent reduction in distance. An average-sized developing country would raise exports by about 36 percent. Most countries are much smaller than average however, so the typical effect is 8 percent. This difference is chiefly due to multilateral resistance: it is bilateral trade costs relative to multilateral trade costs that matter for bilateral exports, and multilateral resistance is more important for small countries.

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Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.

Volume (Year): 75 (2013)
Issue (Month): 6 (December)
Pages: 855-886

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Handle: RePEc:bla:obuest:v:75:y:2013:i:6:p:855-886
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  1. Alberto Behar & Benjamin D. Nelson, 2009. "Trade Flows, Multilateral Resistance and Firm Heterogeneity," Economics Series Working Papers 440, University of Oxford, Department of Economics.
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  9. Marilyne Huchet-Bourdon & Anna Lipchitz & Audrey Rousson, 2009. "Aid for Trade in Developing Countries: Complex Linkages for Real Effectiveness," African Development Review, African Development Bank, vol. 21(2), pages 243-290.
  10. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
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