Has Distance Died? Evidence from a Panel Gravity Model

Jean Brun (), Celine Carrere, Patrick Guillaumont () and Jaime de Melo

Chapter 13 in Developing Countries in the World Economy, 2015, pp 299-320 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The estimated coefficient of distance on the volume of trade is generally found to increase rather than decrease through time using the traditional gravity model of trade. This distance puzzle proved robust to several ad hoc versions of the model using data for 1962-96 for a large sample of 130 countries. The introduction of an "augmented" barrier to trade function removes the paradox, yielding a decline in the estimate of the elasticity of trade to distance of about 11 percent over the 35-year period for the whole sample. However, the "death of distance" is shown to be largely confined to bilateral trade between rich countries, with poor countries becoming marginalized.

Keywords: Trade Barriers and Market Structure; Quantitative Restrictions; Political Economy and Migration; Trade and the Environment (search for similar items in EconPapers)
Date: 2015
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Related works:
Journal Article: Has Distance Died? Evidence from a Panel Gravity Model (2005)
Working Paper: Has Distance Died? Evidence from a Panel Gravity Model (2002)
Working Paper: Has Distance Died? Evidence from a Panel Gravity Model (2002)
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