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Time zone-related continuity and synchronization effects on bilateral trade flows

  • Rebecca Tomasik

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    This paper finds the first empirical evidence of the time zone-related continuity effects on international trade. Several recent studies in the fragmentation/distance literatures provide theoretical justification for both positive (continuity) and negative (synchronization) effects of increased time zone differences on global export flows. This paper explicitly tests for the presence of both effects using bilateral manufacturing and service trade for 20 countries and 56 partner countries from 2000 to 2008. Results consistent with the theoretical expectations are found using a Poisson pseudo-maximum likelihood estimator. The general time zone difference effect on total exports is negative, suggesting the synchronization effect dominates. However, for services trade, the positive continuity effect is noted, indicating that time zones affect manufacturing and service trades differently. These results are robust to changes in the time zone, distance, and language measures, as well as alternate estimation techniques. Copyright Kiel Institute 2013

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    File URL: http://hdl.handle.net/10.1007/s10290-013-0147-4
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    Article provided by Springer in its journal Review of World Economics.

    Volume (Year): 149 (2013)
    Issue (Month): 2 (June)
    Pages: 321-342

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    Handle: RePEc:spr:weltar:v:149:y:2013:i:2:p:321-342
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