IDEAS home Printed from https://ideas.repec.org/p/fip/fedgfe/2014-88.html
   My bibliography  Save this paper

Diffusion of Containerization

Author

Abstract

This paper uses a newly constructed, comprehensive dataset to investigate the diffusion of containerization. The data show that country adoption is exceptionally fast while firm usage increases more slowly. To guide my empirical investigation, I build a multi-country trade model with endogenous adoption of a new transportation technology that is consistent with these facts. I then test empirically the predictions of the model and find that: (1) usage of containerization increases with firms' fixed costs and the size and average income of the container network; and (2) adoption depends on expected future usage, adoption costs, and trade with the United States, the first and largest user of containerization.

Suggested Citation

  • Gisela Rua, 2014. "Diffusion of Containerization," Finance and Economics Discussion Series 2014-88, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgfe:2014-88
    as

    Download full text from publisher

    File URL: http://www.federalreserve.gov/econresdata/feds/2014/files/201488pap.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
    2. Mr. Luc Laeven & Mr. Fabian Valencia, 2010. "Resolution of Banking Crises: The Good, the Bad, and the Ugly," IMF Working Papers 2010/146, International Monetary Fund.
    3. Frankel, Jeffrey A. & Wei, Shang-Jin, 1993. "Emerging Currency Blocs," Center for International and Development Economics Research (CIDER) Working Papers 233209, University of California-Berkeley, Department of Economics.
    4. Garth Saloner & Andrea Shepard, 1995. "Adoption of Technologies with Network Effects: An Empirical Examination of the Adoption of Teller Machines," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 479-501, Autumn.
    5. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    6. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    7. Stoneman, Paul & Battisti, Giuliana, 2010. "The Diffusion of New Technology," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 733-760, Elsevier.
    8. Clark, Ximena & Dollar, David & Micco, Alejandro, 2004. "Port efficiency, maritime transport costs, and bilateral trade," Journal of Development Economics, Elsevier, vol. 75(2), pages 417-450, December.
    9. Battisti, Giuliana & Stoneman, Paul, 2003. "Inter- and intra-firm effects in the diffusion of new process technology," Research Policy, Elsevier, vol. 32(9), pages 1641-1655, October.
    10. Mohammed, Saif I. Shah & Williamson, Jeffrey G., 2004. "Freight rates and productivity gains in British tramp shipping 1869-1950," Explorations in Economic History, Elsevier, vol. 41(2), pages 172-203, April.
    11. Glick, Reuven & Rose, Andrew K., 2002. "Does a currency union affect trade? The time-series evidence," European Economic Review, Elsevier, vol. 46(6), pages 1125-1151, June.
    12. Gautam Gowrisankaran & Joanna Stavins, 2004. "Network Externalities and Technology Adoption: Lessons from Electronic Payments," RAND Journal of Economics, The RAND Corporation, vol. 35(2), pages 260-276, Summer.
    13. Comin, D. & Hobijn, B., 2004. "Cross-country technology adoption: making the theories face the facts," Journal of Monetary Economics, Elsevier, vol. 51(1), pages 39-83, January.
    14. Geroski, P. A., 2000. "Models of technology diffusion," Research Policy, Elsevier, vol. 29(4-5), pages 603-625, April.
    15. Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592, December.
    16. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 531-542.
    17. David, Paul A. & Olsen, Trond E., 1992. "Technology adoption, learning spillovers, and the optimal duration of patent-based monopolies," International Journal of Industrial Organization, Elsevier, vol. 10(4), pages 517-543, December.
    18. Jonathan Skinner & Douglas Staiger, 2007. "Technology Adoption from Hybrid Corn to Beta-Blockers," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 545-570, National Bureau of Economic Research, Inc.
    19. Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
    20. Gort, Michael & Klepper, Steven, 1982. "Time Paths in the Diffusion of Product Innovations," Economic Journal, Royal Economic Society, vol. 92(367), pages 630-653, September.
    21. Bogart, Dan, 2007. "Neighbors, networks, and the development of transport systems: Explaining the diffusion of turnpike trusts in eighteenth-century England," Journal of Urban Economics, Elsevier, vol. 61(2), pages 238-262, March.
    22. Eichengreen, Barry & Irwin, Douglas A., 1995. "Trade blocs, currency blocs and the reorientation of world trade in the 1930s," Journal of International Economics, Elsevier, vol. 38(1-2), pages 1-24, February.
    23. Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-841, August.
    24. Goolsbee, Austan & Klenow, Peter J, 2002. "Evidence on Learning and Network Externalities in the Diffusion of Home Computers," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 317-343, October.
    25. David Hummels, 2007. "Transportation Costs and International Trade in the Second Era of Globalization," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 131-154, Summer.
    26. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    27. Diego Comin & Bart Hobijn & Emilie Rovito, 2008. "A new approach to measuring technology with an application to the shape of the diffusion curves," The Journal of Technology Transfer, Springer, vol. 33(2), pages 187-207, April.
    28. Marc Levinson, 2008. "Introduction to The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger," Introductory Chapters, in: The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, Princeton University Press.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. César Ducruet & Réka Juhász & Dávid Krisztián Nagy & Claudia Steinwender, 2019. "All Aboard: The Aggregate Effects of Port Development," Working Papers 1160, Barcelona School of Economics.
    2. Bernhofen, Daniel M. & El-Sahli, Zouheir & Kneller, Richard, 2016. "Estimating the effects of the container revolution on world trade," Journal of International Economics, Elsevier, vol. 98(C), pages 36-50.
    3. Jackson, Matthew O. & Nei, Stephen, 2014. "Networks of Military Alliances, Wars, and International Trade," Climate Change and Sustainable Development 172702, Fondazione Eni Enrico Mattei (FEEM).
    4. Coşar, A. Kerem & Demir, Banu, 2018. "Shipping inside the box: Containerization and trade," Journal of International Economics, Elsevier, vol. 114(C), pages 331-345.
    5. Thomas J. Holmes & Ethan Singer, 2017. "Indivisibilities in Distribution," Working Papers 739, Federal Reserve Bank of Minneapolis.
    6. Daniel M. Bernhofen & Zouheir El‐Sahli & Richard Kneller, 2021. "The impact of technological change on new trade: Evidence from the container revolution," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(2), pages 923-943, May.
    7. Brooks, Leah & Gendron-Carrier, Nicolas & Rua, Gisela, 2021. "The local impact of containerization," Journal of Urban Economics, Elsevier, vol. 126(C).
    8. Ulltveit-Moe, Karen Helene & Heiland, Inga & Moxnes, Andreas & Zi, Yuan, 2019. "Trade From Space: Shipping Networks and The Global Implications of Local Shocks," CEPR Discussion Papers 14193, C.E.P.R. Discussion Papers.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xiong, Hang & Payne, Diane & Kinsella, Stephen, 2016. "Peer effects in the diffusion of innovations: Theory and simulation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 63(C), pages 1-13.
    2. Morten L. Bech & Bart Hobijn, 2007. "Technology Diffusion within Central Banking: The Case of Real-Time Gross Settlement," International Journal of Central Banking, International Journal of Central Banking, vol. 3(3), pages 147-181, September.
    3. Daniel Birke, 2009. "The Economics Of Networks: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 762-793, September.
    4. Comin, Diego & Mestieri, Martí, 2014. "Technology Diffusion: Measurement, Causes, and Consequences," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 565-622, Elsevier.
    5. Feng, Yao, 2011. "Local spillovers and learning from neighbors: Evidence from durable adoptions in rural China," MPRA Paper 33924, University Library of Munich, Germany.
    6. Coşar, A. Kerem & Demir, Banu, 2018. "Shipping inside the box: Containerization and trade," Journal of International Economics, Elsevier, vol. 114(C), pages 331-345.
    7. Coe, David T. & Helpman, Elhanan & Hoffmaister, Alexander W., 2009. "International R&D spillovers and institutions," European Economic Review, Elsevier, vol. 53(7), pages 723-741, October.
    8. Biancini, Sara & Bombarda, Pamela, 2021. "Intellectual property rights, multinational firms and technology transfers," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 191-210.
    9. Diego Comin & Bart Hobijn, 2010. "An Exploration of Technology Diffusion," American Economic Review, American Economic Association, vol. 100(5), pages 2031-2059, December.
    10. Jullien, Bruno & Pavan, Alessandro & Rysman, Marc, 2021. "Two-sided Markets, Pricing, and Network Effects," TSE Working Papers 21-1238, Toulouse School of Economics (TSE).
    11. Eicher, Theo S. & Henn, Christian, 2011. "In search of WTO trade effects: Preferential trade agreements promote trade strongly, but unevenly," Journal of International Economics, Elsevier, vol. 83(2), pages 137-153, March.
    12. Dennis Novy, 2013. "Gravity Redux: Measuring International Trade Costs With Panel Data," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 101-121, January.
    13. Stoneman, Paul & Battisti, Giuliana, 2010. "The Diffusion of New Technology," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 733-760, Elsevier.
    14. Jacks, David S. & Meissner, Christopher M. & Novy, Dennis, 2011. "Trade booms, trade busts, and trade costs," Journal of International Economics, Elsevier, vol. 83(2), pages 185-201, March.
    15. Gautam Gowrisankaran & Joanna Stavins, 2004. "Network Externalities and Technology Adoption: Lessons from Electronic Payments," RAND Journal of Economics, The RAND Corporation, vol. 35(2), pages 260-276, Summer.
    16. John Mayo & Scott Wallsten, 2011. "From Network Externalities to Broadband Growth Externalities: a Bridge not yet Built," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 38(2), pages 173-190, March.
    17. Mariko Klasing & Petros Milionis & Robert Zymek, 2015. "Gravity across Space and Time," Edinburgh School of Economics Discussion Paper Series 265, Edinburgh School of Economics, University of Edinburgh.
    18. Birke, Daniel & Swann, G.M. Peter, 2010. "Network effects, network structure and consumer interaction in mobile telecommunications in Europe and Asia," Journal of Economic Behavior & Organization, Elsevier, vol. 76(2), pages 153-167, November.
    19. Dominik Boddin & Frank Stähler, 2018. "The Organization of International Trade," CESifo Working Paper Series 7378, CESifo.
    20. Stoneman, Paul, 2011. "Soft Innovation: Economics, Product Aesthetics, and the Creative Industries," OUP Catalogue, Oxford University Press, number 9780199697021.

    More about this item

    Keywords

    Globalization; transportation; trade; technology diffusion;
    All these keywords.

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:2014-88. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ryan Wolfslayer ; Keisha Fournillier (email available below). General contact details of provider: https://edirc.repec.org/data/frbgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.