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The Puzzling Persistence of the Distance Effect on Bilateral Trade

Author

Listed:
  • Anne-Célia Disdier

    (Centro Studi Luca d’Agliano; TEAM, Université de Paris I Panthéon Sorbonne)

  • Keith Head

    (Sauder School of Business, University of British Columbia)

Abstract

One of the best established empirical results in international economics is that bilateral trade decreases with distance. Although well-known, these results have not been systematically analyzed before. We examine 1052 distance effects estimated in 78 papers. Information collected on each estimate allows us to test hypotheses about causes of variation in the estimates. We focus on the question of whether distance effects have fallen over time. We find that the negative impact of distance on trade is not shrinking, but increasing slightly over the last century. This result holds even after controlling for many important differences in samples and methods.

Suggested Citation

  • Anne-Célia Disdier & Keith Head, 2004. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," Development Working Papers 186, Centro Studi Luca d'Agliano, University of Milano.
  • Handle: RePEc:csl:devewp:186
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    File URL: http://www.dagliano.unimi.it/media/WP2004_186.pdf
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    Keywords

    shrinking world; globalization; meta-analysis;

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • F10 - International Economics - - Trade - - - General

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