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Bulkiness of goods and the gravity of international trade: Differential impact of trade barriers

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  • Yang, Xuebing

Abstract

This study investigates how the trade elasticity to trade barriers, or the lack thereof, varies with the bulkiness of goods, measured as the value-to-weight ratio (V/W ratio). The empirical analysis presented herein offers compelling evidence that lighter goods, characterized by higher V/W ratios, demonstrate reduced trade elasticity to distance, contiguity, and colonial relationships but heightened trade sensitivity to language. These findings emphasize the importance of accounting for the variations in V/W ratios when applying gravity models and reveal noteworthy heterogeneity in trade elasticity at the country and trade-pair levels.

Suggested Citation

  • Yang, Xuebing, 2024. "Bulkiness of goods and the gravity of international trade: Differential impact of trade barriers," Research in Economics, Elsevier, vol. 78(4).
    • Handle: RePEc:eee:reecon:v:78:y:2024:i:4:s1090944324000772
    DOI: 10.1016/j.rie.2024.101013
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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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