Exports and Logistics
Do better trade logistics reduce trade costs, raising a country's exports?� Yes, but the magnitude of the effect depends on country size.� Applying a new gravity model to a comprehensive logistics index, we find that an average-sized country would raise exports by about 46% after a one-standard deviation improvement in logistics.� Most countries are much smaller than average however, so the typical effect is only 6%.� This difference is chiefly due to multilateral resistance, which stresses that bilateral trade costs relative to multilateral trade costs matter for bilateral exports.� Our method also distinguishes between the effects of logistics on the intensive margin (exports per firm) and the extensive margin (the number of exporting firms) of trade.
|Date of creation:||01 Jul 2009|
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