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Disentangling the impact of infrastructure on trade using a new index of infrastructure

Author

Listed:
  • Julian Donaubauer

    (Helmut Schmidt University Hamburg)

  • Alexander Glas

    (Heidelberg University)

  • Birgit Meyer

    (Vienna University of Economics and Business)

  • Peter Nunnenkamp

    (Kiel Institute for the World Economy)

Abstract

Making use of considerably improved measures of infrastructure, the study assesses the impact of infrastructure on bilateral trade for a panel of 150 developed and emerging economies during the period 1992–2011. The authors make use of a gravity approach to disentangle the impact of infrastructure on trade and trade costs. Improving infrastructure endowments and quality decreases trade costs and increases international trade flows. Countries with improved infrastructure reduce not only bilateral trade costs but also multilateral trade costs. The decomposition of effects indicates that better infrastructure encourages higher export flows relative to domestic trade flows. Main results of the study prove to be robust, also when considering distinct trade categories (consumption goods, intermediates, and capital goods) for a smaller sample.

Suggested Citation

  • Julian Donaubauer & Alexander Glas & Birgit Meyer & Peter Nunnenkamp, 2018. "Disentangling the impact of infrastructure on trade using a new index of infrastructure," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(4), pages 745-784, November.
  • Handle: RePEc:spr:weltar:v:154:y:2018:i:4:d:10.1007_s10290-018-0322-8
    DOI: 10.1007/s10290-018-0322-8
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    3. Bottasso, Anna & Conti, Maurizio & Robbiano, Simone & Santagata, Marta, 2020. "Roads to innovation: evidence from Italy," MPRA Paper 104735, University Library of Munich, Germany.
    4. Korff, Alex & Steffen, Nico, 2019. "Economic preferences and trade outcomes," DICE Discussion Papers 321, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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    More about this item

    Keywords

    Trade; Gravity; Infrastructure; Transport; ICT; Energy; Finance;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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