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Shaky Roads and Trembling Exports: Assessing the Trade Effects of Domestic Infrastructure Using a Natural Experiment

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  • Volpe Martincus, Christian
  • Blyde, Juan S.

Abstract

Our knowledge of the trade effects of domestic infrastructure is very limited. The reason is twofold. First, data needed to examine these effects are not readily available. Second, identifying such effects requires properly addressing potential endogeneity problems affecting the relationship between internal infrastructure and trade. In this paper, we overcome these limitations by combining firm-level data with detailed geo-referenced information on Chile and by exploiting the earthquake that took place in this country in 2010 as an exogenous source of variation in available infrastructure and thereby in transport costs. We find that diminished transportation infrastructure had a significant negative impact on firms' exports.

Suggested Citation

  • Volpe Martincus, Christian & Blyde, Juan S., 2012. "Shaky Roads and Trembling Exports: Assessing the Trade Effects of Domestic Infrastructure Using a Natural Experiment," IDB Publications (Working Papers) 4650, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:4650
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    More about this item

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D2 - Microeconomics - - Production and Organizations
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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