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Distance, Globalization, and International Trade

Author

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  • Borchert, Ingo

    (University of Sussex)

  • Yotov, Yoto

    (Drexel University)

Abstract

We offer a robust solution to the distance puzzle in international trade within the structural gravity framework. Then we obtain country-specific estimates of the effects of distance on trade. We find that the effects of globalization on manufacturing trade over the period 1986-2006 are non-monotonic across country income groups. The biggest winners from globalization are countries in the middle of the world income distribution. Advanced economies in our sample have enjoyed gains too; however, according to our estimates, low income countries have not nearly benefitted from globalization as much as middle income countries. The estimated country-specific changes in distance effects are correlated systematically with variables commonly identified as globalization forces.

Suggested Citation

  • Borchert, Ingo & Yotov, Yoto, 2016. "Distance, Globalization, and International Trade," School of Economics Working Paper Series 2016-8, LeBow College of Business, Drexel University.
    • Handle: RePEc:ris:drxlwp:2016_008
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    13. MORIKAWA Masayuki, 2018. "Effects of Distance and Borders on International and Interregional Tourist Flows: A micro-gravity analysis," Discussion papers 18021, Research Institute of Economy, Trade and Industry (RIETI).
    14. Hillrichs, Dorothee & Vannoorenberghe, Gonzague, 2022. "Trade costs, home bias and the unequal gains from trade," Journal of International Economics, Elsevier, vol. 139(C).
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    16. Michael Pfaffermayr, 2020. "Trade creation and trade diversion of economic integration agreements revisited: a constrained panel pseudo-maximum likelihood approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(4), pages 985-1024, November.
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    18. Erick Kitenge & Sajal Lahiri, 2022. "Is the Internet bringing down language‐based barriers to international trade?," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 566-605, May.
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    21. Julia Spornberger, 2022. "EU integration and structural gravity: A comprehensive quantification of the border effect on trade," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 915-938, September.
    22. Silviano Esteve‐Pérez & Salvador Gil‐Pareja & Rafael Llorca‐Vivero & José Antonio Martínez‐Serrano, 2020. "EMU and trade: A PPML re‐assessment with intra‐national trade flows," The World Economy, Wiley Blackwell, vol. 43(10), pages 2574-2599, October.
    23. Zoltan Lakner & Anna Kiss & Bela Vizvari & Jozsef Popp, 2021. "Trade Liberalisation and Sustainability: A Case Study of Agro-Food Transport Optimisation," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 822-839.
    24. Bonga-Bonga, Lumengo & Manguzvane, Mathias Mandla, 2023. "Stock market correlation and geographical distance: does the degree of economic integration matter?," MPRA Paper 116476, University Library of Munich, Germany.
    25. Kitenge, Erick, 2021. "The Linder hypothesis during the globalization era," Economics Letters, Elsevier, vol. 200(C).

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    More about this item

    Keywords

    Distance Puzzle; Missing Globalization; Structural Gravity; Poor Countries;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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