Entrepôt: Hubs, Scale, and Trade Costs

Sharat Ganapati, Woan Foong Wong and Oren Ziv

No 29015, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the global trade network and quantify its trade and welfare impact. We document that the trade network is a hub-and-spoke system where 80% of trade is shipped indirectly, nearly all via entrepôts—major hubs that facilitate trade between many origins and destinations. We estimate indirect-shipping-consistent trade costs using a model where shipments can be sent indirectly through an endogenous transport network and develop a geography-based instrument to estimate scale economies in shipping. Network and scale effects propagate local trade cost changes globally. Counterfactual infrastructure improvements at entrepôts generate ten times the global welfare impact relative to non-entrepôts.

JEL-codes: F10 F12 F14 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-geo, nep-int, nep-net, nep-tre and nep-ure
Note: ITI
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Entrepôt: Hubs, Scale, and Trade Costs (2024)
Working Paper: Entrepôt: Hubs, Scale, and Trade Costs (2020)
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