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Estimating the Effects of the Container Revolution on World Trade

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Abstract

The introduction of containerization triggered complementary technological and organizational changes that revolutionized global freight transport. Despite numerous claims about the importance of containerization in stimulating international trade, econometric estimates on the effects of containerization on trade appear to be missing. Our paper fills this gap in the literature. Our key idea is to exploit time and cross-sectional variation in countries’ adoption of port or railway container facilities to construct a time-varying bilateral technology variable and estimate its effect on explaining variations in bilateral product level trade flows in a large panel for the period 1962-1990. Our estimates suggest that containerization did not only stimulate trade in containerizable products (like auto parts) but also had complementary effects on non-containerizables (like automobiles). As expected, we find larger effects on North-North trade than on North-South or South-South trade and much smaller effects when ignoring railway containerization. Regarding North-North trade, the cumulative average treatment effects of containerization over a 20 year time period amount to about 700%, can be interpreted as causal, and are much larger than the effects of free trade agreements or the GATT. In a nutshell, we provide the first econometric evidence for containerization to be a driver of 20th century economic globalization.

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  • Bernhofen, Daniel M. & El-Sahli, Zouheir & Kneller, Richard, 2013. "Estimating the Effects of the Container Revolution on World Trade," Working Papers 2013:4, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2013_004
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    1. New historical development papers on my desk
      by Robin in Cherokee Gothic on 2013-04-18 18:00:05

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    Cited by:

    1. Charlotte Emlinger & Viola Lamani, 2017. "International Trade, Quality Sorting and Trade Costs: The Case of Cognac," Working Papers 2017-18, CEPII research center.
    2. Jackson, Matthew O. & Nei, Stephen, 2014. "Networks of Military Alliances, Wars, and International Trade," Research Papers 3097, Stanford University, Graduate School of Business.
    3. Zouheir El-Sahli & Richard Upward, 2015. "Off the waterfront: The long-run impact of technological change on dock workers," Discussion Papers 2015-06, University of Nottingham, GEP.
    4. Keith Head & Thierry Mayer, 2013. "What separates us? Sources of resistance to globalization," Canadian Journal of Economics, Canadian Economics Association, vol. 46(4), pages 1196-1231, November.
    5. Valenciano, Jaime de Pablo & Battistuzzi, Miguel Angel Giacinti & Azcaráte, Tomás García, 0. ""Banana War" And World Trade Changes," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3.
    6. Redding, Stephen J. & Turner, Matthew A., 2015. "Transportation Costs and the Spatial Organization of Economic Activity," Handbook of Regional and Urban Economics, Elsevier.
    7. Daniel M. Bernhofen & Zouheir El-Sahli & Richard Kneller, 2016. "The Impact of Technological Change on New Trade: Evidence from the Container Revolution," CESifo Working Paper Series 6069, CESifo Group Munich.
    8. Holmes, Thomas J. & Singer, Ethan, 2017. "Indivisibilities in Distribution," Working Papers 739, Federal Reserve Bank of Minneapolis.
    9. A.Kerem Cosar & Banu Demir, 2017. "Shipping inside the Box: Containerization and Trade," Working Papers DP-2016-37, Economic Research Institute for ASEAN and East Asia (ERIA).
    10. Peter Egger & Sergey K. Nigai, 2016. "World-Trade Growth Accounting," CESifo Working Paper Series 5831, CESifo Group Munich.
    11. César Ducruet & Hidekazu Itoh, 2016. "Regions and material flows: investigating the regional branching and industry relatedness of port traffics in a global perspective," Journal of Economic Geography, Oxford University Press, vol. 16(4), pages 805-830.
    12. Zouheir El-Sahli, 2017. "The Role of Inbound Tourist Flows in Promoting Exports," AMSE Working Papers 1721, Aix-Marseille School of Economics, Marseille, France.
    13. repec:elg:eechap:17028_14 is not listed on IDEAS
    14. Emek Basker & Timothy Simcoe, 2017. "Upstream, Downstream: Diffusion and Impacts of the Universal Product Code," NBER Working Papers 24040, National Bureau of Economic Research, Inc.
    15. Ariel Burstein & Javier Cravino, 2015. "Measured Aggregate Gains from International Trade," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 181-218, April.
    16. Marco FUGAZZA & Jan HOFFMANN & Rado RAZAFINOMBANA, 2015. "Building A Dataset For Bilateral Maritime Connectivity," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 41, pages 101-124.
    17. Jerónimo Carballo & Georg Schaur & Christian Volpe Martincus, 2017. "Transportation and Trade Interactions: A Trade Facilitation Perspective," IDB Publications (Working Papers) 97957, Inter-American Development Bank.
    18. Thomas J. Holmes & Ethan Singer, 2018. "Indivisibilities in Distribution," NBER Working Papers 24525, National Bureau of Economic Research, Inc.
    19. Charlotte Emlinger & Viola Lamani, 2018. "International Trade, Quality Sorting and Trade Costs: The Case of Cognac," Cahiers du GREThA 2018-05, Groupe de Recherche en Economie Théorique et Appliquée.
    20. Massimo Geloso Grosso & Hildegunn Kyvik Nordås & Asako Ueno & Frederic Gonzales & Iza Lejárraga & Sébastien Miroudot & Dorothée Rouzet, 2014. "Services Trade Restrictiveness Index (STRI): Transport and Courier Services," OECD Trade Policy Papers 176, OECD Publishing.
    21. repec:bla:worlde:v:39:y:2016:i:12:p:2025-2045 is not listed on IDEAS
    22. Johannes Pöschl & Neil Foster-McGregor & Robert Stehrer, 2016. "International R&D Spillovers and Business Service Innovation," The World Economy, Wiley Blackwell, vol. 39(12), pages 2025-2045, December.
    23. Salamat Ali & Richard Kneller & Chris Milner, 2017. "Market-specific trade costs and firm dynamics in Pakistan: Evaluating the US integrated cargo containers control programme," Discussion Papers 2017-02, University of Nottingham, GEP.
    24. Bensassi, Sami & Márquez-Ramos, Laura & Martínez-Zarzoso, Inmaculada & Suárez-Burguet, Celestino, 2015. "Relationship between logistics infrastructure and trade: Evidence from Spanish regional exports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 72(C), pages 47-61.
    25. Jerónimo Carballo & Georg Schaur & Christian Volpe Martincus, 2018. "Transportation and trade interactions: a trade facilitation perspective," Chapters,in: Handbook of International Trade and Transportation, chapter 14, pages 422-450 Edward Elgar Publishing.

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    Keywords

    containerization; 20th century global transportation infrastructure;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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