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Trade costs in the developing world : 1995 - 2010

Author

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  • Arvis, Jean-François
  • Duval, Yann
  • Shepherd, Ben
  • Utoktham,Chorthip

Abstract

The authors use newly collected data on trade and production in 178 countries to infer estimates of trade costs in agriculture and manufactured goods for the 1995-2010 period. The data show that trade costs are strongly declining in per capita income. Moreover, the rate of change of trade costs is largely unfavorable to the developing world: trade costs are falling noticeably faster in developed countries than in developing ones, which serves to increase the relative isolation of the latter. In particular, Sub-Saharan African countries and low-income countries remain subject to very high levels of trade costs. In terms of policy implications, the analysis finds that maritime transport connectivity and logistics performance are very important determinants of bilateral trade costs: in some specifications, their combined effect is comparable to that of geographical distance. Traditional and non-traditional trade policies more generally, including market entry barriers and regional integration agreements, play a significant role in shaping the trade costs landscape.

Suggested Citation

  • Arvis, Jean-François & Duval, Yann & Shepherd, Ben & Utoktham,Chorthip, 2013. "Trade costs in the developing world : 1995 - 2010," Policy Research Working Paper Series 6309, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6309
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    References listed on IDEAS

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    Cited by:

    1. repec:pit:wpaper:521 is not listed on IDEAS
    2. Daniel Saslavsky & Ben Shepherd, 2014. "Facilitating international production networks: The role of trade logistics," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(7), pages 979-999, October.
    3. de Melo, Jaime & Tsikata, Yvonne, 2014. "Regional integration in Africa: Challenges and prospects," WIDER Working Paper Series 037, World Institute for Development Economic Research (UNU-WIDER).
    4. Jaime DE MELO & Marcelo OLARREAGA, 2017. "Trade Related Institutions and Development," Working Papers P199, FERDI.
    5. Arvis, Jean-François & Shepherd, Ben & Reis, José Guilherme & Duval, Yann & Utoktham, Chorthip, 2013. "Trade Costs and Development: A New Data Set," World Bank - Economic Premise, The World Bank, issue 104, pages 1-4, January.
    6. Eric O'N. Fisher & John Gilbert & Kathryn G. Marshall & Reza Oladi, 2015. "A New Measure of Economic Distance," CESifo Working Paper Series 5362, CESifo Group Munich.
    7. Lord, Montague J. & Clarke, Julian & Record, Richard & Artuso, Fabio, 2014. "Trading Costs in East Asia’s Global Value Chains," MPRA Paper 61061, University Library of Munich, Germany.
    8. Chan, Jackie M.L. & Manova, Kalina, 2015. "Financial development and the choice of trade partners," Journal of Development Economics, Elsevier, vol. 116(C), pages 122-145.
    9. Salamat Ali & Chris Milner, 2015. "Trade Costs and the Composition of Developing Countries’ Exports," Discussion Papers 2015-13, University of Nottingham, GEP.
    10. Jaime DE MELO & Laurent WAGNER, 2015. "Aid For Trade as finance for the Poor," Working Papers P125, FERDI.
    11. Eugene Bempong Nyantakyi & Steven Husted & Shuichiro Nishioka, 2015. "Trade Frictions and Market Access of Developing Countries: A Product-level Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 23(5), pages 924-945, November.
    12. Evgeniya Yushkova, 2014. "Impact of ICT on trade in different technology groups: analysis and implications," International Economics and Economic Policy, Springer, vol. 11(1), pages 165-177, February.
    13. Beverelli, Cosimo & Neumueller, Simon & Teh, Robert, 2015. "Export Diversification Effects of the WTO Trade Facilitation Agreement," World Development, Elsevier, vol. 76(C), pages 293-310.
    14. João Amador & Sónia Cabral, 2014. "Global Value Chains: Surveying Drivers, Measures and Impacts," Working Papers w201403, Banco de Portugal, Economics and Research Department.
    15. Gebreeyesus M., 2013. "The End of the Multifibre Arrangement (MFA) and the Heterogeneous Performance of Quota-Constrained Countries," MERIT Working Papers 035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Flentø, Daniel & Ponte, Stefano, 2017. "Least-Developed Countries in a World of Global Value Chains: Are WTO Trade Negotiations Helping?," World Development, Elsevier, vol. 94(C), pages 366-374.
    17. Bernard Hoekman, 2014. "Sustaining multilateral trade cooperation in a multipolar world economy," The Review of International Organizations, Springer, vol. 9(2), pages 241-260, June.
    18. Salamat Ali, 2017. "Exchange Rate Effects on Agricultural Exports: Firm-level Evidence from Pakistan," Discussion Papers 2017-09, University of Nottingham, GEP.
    19. Ramon L. Clarete, 2017. "Measuring Trade Costs and Gains from Trade Facilitation in the Philippines," UP School of Economics Discussion Papers 201706, University of the Philippines School of Economics.
    20. Briceno-Garmendia, Cecilia & Bofinger, Heinrich C. & Cubas, Diana & Millan-Placci, Maria Florencia, 2015. "Connectivity for Caribbean countries : an initial assessment," Policy Research Working Paper Series 7169, The World Bank.
    21. Anderson, Kym & Thennakoon, Jayanthi, 2015. "Food Prices Spikes and Poor, Small Economies: What Role for Trade Policies," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 10(1), March.
    22. repec:afe:journl:v:19:y:2017:i:1:p:1-26 is not listed on IDEAS
    23. World Bank, 2013. "Greek Logistics : Unlocking Growth Potential through Regulatory Reform and Complementary Measures," World Bank Other Operational Studies 16764, The World Bank.
    24. Kilolo, Jean-Marc Malambwe, 2013. "Country size, trade liberalization and transfers," MPRA Paper 47996, University Library of Munich, Germany.
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    More about this item

    Keywords

    Economic Theory&Research; Free Trade; Emerging Markets; Trade Law; Trade Policy;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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