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

  • Christian Volpe Martincus
  • Juan S. Blyde

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.

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Paper provided by Inter-American Development Bank in its series IDB Publications (Working Papers) with number 82533.

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Date of creation: May 2012
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Handle: RePEc:idb:brikps:82533
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  1. Eduardo A. Cavallo & Ilan Noy & Juan Pantano & Sebastián Galiani, 2010. "Catastrophic Natural Disasters and Economic Growth," IDB Publications (Working Papers) 6818, Inter-American Development Bank.
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  9. Mark Skidmore & Hideki Toya, 2005. "Economic Development and the Impacts of Natural Disasters," Working Papers 05-04, UW-Whitewater, Department of Economics.
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  17. Mauricio Mesquita Moreira & Christian Volpe Martincus & Juan S. Blyde, 2008. "Unclogging the Arteries: The Impact of Transport Costs on Latin American and Caribbean Trade," IDB Publications (Books), Inter-American Development Bank, number 13138, May.
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