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The distance puzzle: on the interpretation of the distance coefficient in gravity equations

Listed author(s):
  • Buch, Claudia M.
  • Kleinert, Jorn
  • Toubal, Farid

Although globalization has diminished the importance of distance, empirical gravity models find little change in distance coefficients. We argue that changing distance costs are largely reflected in the constant term. A proportional fall in distance costs is consistent with constant distance coefficients.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165-1765(03)00386-0
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 83 (2004)
Issue (Month): 3 (June)
Pages: 293-298

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Handle: RePEc:eee:ecolet:v:83:y:2004:i:3:p:293-298
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Richard Portes & =20 H=E9l=E8ne Rey, 2001. "The Determinants of Cross-Border Equity Flows: The Geography of=20 Information," International Finance 0012002, EconWPA.
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