Distance, Globalization, and International Trade

Ingo Borchert and Yoto Yotov

No 2016-8, School of Economics Working Paper Series from LeBow College of Business, 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.

Keywords: Distance Puzzle; Missing Globalization; Structural Gravity; Poor Countries (search for similar items in EconPapers)
JEL-codes: F13 F14 F16 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2016-07-11
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Distance, globalization, and international trade (2017)
Working Paper: Distance, Globalization, and International Trade (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:drxlwp:2016_008

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