Bulkiness of goods and the gravity of international trade: Differential impact of trade barriers

Xuebing Yang

Research in Economics, 2024, vol. 78, issue 4

Abstract: This study investigates how the trade elasticity to trade barriers, or the lack thereof, varies with the bulkiness of goods, measured as the value-to-weight ratio (V/W ratio). The empirical analysis presented herein offers compelling evidence that lighter goods, characterized by higher V/W ratios, demonstrate reduced trade elasticity to distance, contiguity, and colonial relationships but heightened trade sensitivity to language. These findings emphasize the importance of accounting for the variations in V/W ratios when applying gravity models and reveal noteworthy heterogeneity in trade elasticity at the country and trade-pair levels.

Keywords: International trade; Value to weight; Gravity models (search for similar items in EconPapers)
JEL-codes: F10 F14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:78:y:2024:i:4:s1090944324000772

DOI: 10.1016/j.rie.2024.101013

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