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Trading on Time

Author

Listed:
  • Simeon Djankov

    (Ministry of Finance, Bulgaria)

  • Caroline Freund

    (Research Department, World Bank)

  • Cong S. Pham

    (School of Accounting, Economics and Finance, Deakin University)

Abstract

We determine how time delays affect trade, using newly collected data on the days it takes to move standard cargo from the factory gate to the ship in 98 countries. We estimate a difference gravity equation and find that each additional day that a product is delayed prior to being shipped reduces trade by more than 1%. Put differently, each day is equivalent to a country distancing itself from its trade partners by about 70 km on average. We also find that delays have a relatively greater impact on exports of time-sensitive goods, such as perishable agricultural products. © 2010 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. "Trading on Time," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.
  • Handle: RePEc:tpr:restat:v:92:y:2010:i:1:p:166-173
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    References listed on IDEAS

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    1. David L. Hummels & Georg Schaur, 2013. "Time as a Trade Barrier," American Economic Review, American Economic Association, vol. 103(7), pages 2935-2959, December.
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    6. Will Martin & Kym Anderson, 2006. "Agricultural Trade Reform and the Doha Development Agenda," World Bank Publications, The World Bank, number 6889, June.
    7. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
    8. Carolyn L. Evans & James Harrigan, 2005. "Distance, Time, and Specialization: Lean Retailing in General Equilibrium," American Economic Review, American Economic Association, vol. 95(1), pages 292-313, March.
    9. Caroline L. Freund & Diana Weinhold, 2000. "On the effect of the Internet on international trade," International Finance Discussion Papers 693, Board of Governors of the Federal Reserve System (U.S.).
    10. John S. Wilson & Catherine L. Mann & Tsunehiro Otsuki, 2005. "Assessing The Potential Benefit Of Trade Facilitation: A Global Perspective," World Scientific Book Chapters,in: Quantitative Methods For Assessing The Effects Of Non-Tariff Measures And Trade Facilitation, chapter 8, pages 121-160 World Scientific Publishing Co. Pte. Ltd..
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