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Transit Trade

Jeronimo Carballo, Georg Schaur, Alejandro Graziano and Christian Volpe Martincus

No 7688, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: In this paper, we estimate the effects of transit systems that substantially streamline administrative processing of trade flows. In so doing, we use a unique dataset that consists of the entire universe of El Salvador's export transactions over the period 2007-2013 and includes information on the transactions channeled under a new transit regime established with neighboring countries over the same period. Results suggest that this new transit system has been associated with decreased order servicing and variable trade costs. As a consequence, firms' exports increased primarily through higher shipping frequencies. Furthermore, the effects have been strong on foreign sales of time-sensitive goods. This evidence informs one of the main policies covered in the 2013 WTO Agreement of Trade Facilitation.

Keywords: Trading costs; Export Performance; Exporting Firm; Foreign sales; Exports Growth; Export Market; Trade Policy; Export Promotion; Trade Agreements; Road Infrastructure; Customs Administration; trade agreements; trade costs; exporting firm; trade facilitation (search for similar items in EconPapers)
JEL-codes: F14 F13 F10 (search for similar items in EconPapers)
Date: 2016-06
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