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Determinants of Maritime Transport Costs. A Panel Data Analysis for Latin American Trade

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Abstract

This paper analyses the determinants of transport costs for intra-Latin American trade over a period of six years (1999-2004). The data refer to yearly disaggregated (SITC 5 digit level) maritime trade flows on 277 trade routes. With this data set, a transport costs equation is estimated using linear regression analysis in a panel data framework. The first contribution to the literature is to exploit the greater variability present in our data and to control for unobservable heterogeneous effects. The second is to investigate the influence of open registries on the variability of maritime transport costs. Three groups of explanatory variables are considered. Firstly, timevarying variables: use of open registries and trade imbalance. Secondly, variables related to liner shipping network structures: number of liner services, shipping opportunities, deployed ships and deployed TEUs. Finally, product related variables such as volume of shipment, value of product and special characteristics of the cargo (i.e. refrigerated cargo). The results will allow us to quantify the effect of the explanatory variables on international maritime transport costs and to compare the obtained elasticities with previous cross-section analysis. In particular, estimating the impact of the use of open registries on transport cost is a new contribution in this field that could provide policy makers with valuable information to be used in the implementation of economic policies.

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  • Inmaculada Martínez-Zarzoso & Gordon Wilmsmeier, 2008. "Determinants of Maritime Transport Costs. A Panel Data Analysis for Latin American Trade," Ibero America Institute for Econ. Research (IAI) Discussion Papers 172, Ibero-America Institute for Economic Research.
  • Handle: RePEc:got:iaidps:172
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    1. Inmaculada Martinez-Zarzoso & Eva Maria Perez-Garcia & Celestino Suarez-Burguet, 2008. "Do transport costs have a differential effect on trade at the sectoral level?," Applied Economics, Taylor & Francis Journals, vol. 40(24), pages 3145-3157.
    2. Inmaculada Martinez-Zarzoso & Celestino Suarez-Burguet, 2005. "Transport costs and trade: Empirical evidence for Latin American imports from the European union," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(3), pages 353-371.
    3. Jan Hoffmann, 2001. "Latin American Ports: Results and Determinants of Private Sector Participation," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 3(2), pages 221-241, June.
    4. Dollar, David & Micco, Alejandro & Clark, Ximena, 2002. "Maritime transport costs and port efficiency," Policy Research Working Paper Series 2781, The World Bank.
    5. 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.
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    7. Francois, Joseph F & Wooton, Ian, 2001. "Trade in International Transport Services: The Role of Competition," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 249-261, May.
    8. I Martínez-Zarzoso & L García-Menéndez & C Suárez-Burguet, 2003. "Impact of Transport Costs on International Trade: The Case of Spanish Ceramic Exports," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 5(2), pages 179-198, June.
    9. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
    10. Wilmsmeier, Gordon & Hoffmann, Jan & Sanchez, Ricardo J., 2006. "The Impact of Port Characteristics on International Maritime Transport Costs," Research in Transportation Economics, Elsevier, vol. 16(1), pages 117-140, January.
    11. Inmaculada Martinez-Zarzoso & Felicitas D. Nowak-Lehmann, 2007. "Is distance a good proxy for transport costs? The case of competing transport modes," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(3), pages 411-434.
    12. Hoffmann, Jan & Pérez, Gabriel & Wilmsmeier, Gordon, 2002. "International trade and transport profiles of Latin American countries, year 2000," Manuales 19, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    13. 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.
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    Cited by:

    1. Sami Bensassi & Inmaculada Martínez-Zarzoso, 2012. "How Costly is Modern Maritime Piracy to the International Community?," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 869-883, November.
    2. Munasib, Abdul B.A. & Roy, Devesh, 2011. "Nontariff Barriers as Bridge to Cross," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125025, International Association of Agricultural Economists.
    3. Enrico Pastori & Miriam Tagliavia & Enrico Tosti & Simonetta Zappa, 2014. "The survey on international freight rates in Italy: methods and results," Questioni di Economia e Finanza (Occasional Papers) 223, Bank of Italy, Economic Research and International Relations Area.
    4. Sami Bensassi & Laura Márquez-Ramos & Inmaculada Martínez-Zarzoso, 2012. "Economic Integration and the Two Margins of Trade: The Impact of the Barcelona Process on North African Countries' Exports," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 21(2), pages 228-265, March.
    5. Inmaculada Martínez-Zarzoso & Sami Bensassi, 2013. "The Price Of Modern Maritime Piracy," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(5), pages 397-418, October.
    6. Gordon Wilmsmeier & Inmaculada Martínez-Zarzoso & Norbert Fiess, 2010. "Regional Hub Port Development - The Case of Montevideo, Uruguay," Ibero America Institute for Econ. Research (IAI) Discussion Papers 203, Ibero-America Institute for Economic Research.
    7. Jordan Schwartz & José Luis Guasch & Gordon Wilmsmeier, 2009. "Logistics, Transport and Food Prices in LAC: Policy Guidance for Improving Efficiency and Reducing Costs," IDB Publications (Working Papers) 9324, Inter-American Development Bank.
    8. Ozlem Yaylaci, 2012. "Evolution of Trade Costs," EcoMod2012 4267, EcoMod.
    9. De Oliveira, Gabriel Figueiredo, 2014. "Determinants of European freight rates: The role of market power and trade imbalance," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 62(C), pages 23-33.
    10. Patricia Sourdin & Richard Pomfret, 2012. "Trade Facilitation," Books, Edward Elgar Publishing, number 14596.
    11. Jordan Schwartz & José Luis Guasch & Gordon Wilmsmeier, 2009. "Logistics, Transport and Food Prices in LAC: Policy Guidance for Improving Efficiency and Reducing Costs," IDB Publications (Working Papers) 2541, Inter-American Development Bank.
    12. Ricardo J. Sanchez & Gordon Wilmsmeier, 2011. "Liner Shipping Networks and Market Concentration," Chapters,in: International Handbook of Maritime Economics, chapter 9 Edward Elgar Publishing.

    More about this item

    Keywords

    International Transport Costs; Maritime Trade; Latin America; Sectoral Data; Time Series; Open Registries; Competitiveness; liner shipping network structure;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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