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Distance Sensitivity of Export: A Firm-Product Level Approach

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  • Viroj Jienwatcharamongkhol

Abstract

Recent literature suggests that the extent to which exports of a product is influenced by distance depends on the product characteristics. Differentiated products with non-standardised attributes are typically claimed to be more distance-sensitive as transactions should involve interactions between buyers and sellers. But the empirical evidence still finds conflicting results. Previous studies have examined the effect of distance on export values across different product groups. This paper employs a gravity model on Swedish firm-product level export data to analyse the effect of distance on the export decisions as well as export values, respectively. The focus is on how the influence of distance varies across differentiated and non-differentiated products. For both export participation and intensity decisions, the results are not in line with the network/search view and suggest that homogeneous products are more sensitive to distance than differentiated products when controlling for annual shocks and industry heterogeneity. Moreover, I find evidence of a learning effect from past trade experience. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Viroj Jienwatcharamongkhol, 2014. "Distance Sensitivity of Export: A Firm-Product Level Approach," Journal of Industry, Competition and Trade, Springer, vol. 14(4), pages 531-554, December.
    • Handle: RePEc:kap:jincot:v:14:y:2014:i:4:p:531-554
    DOI: 10.1007/s10842-013-0169-6
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    2. Lombardi, Alessia & Verneau, Fabio & Lombardi, Pasquale, 2016. "Development and Trade Competitiveness of the Italian Tomato Sector," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 17(1), January.

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    More about this item

    Keywords

    Distance sensitivity; Export decisions; Gravity model; Firm-product level; Micro-data; F12; F14; F41;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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