Exports and Logistics

Alberto Behar (), Benjamin Nelson and Philip Manners ()

No 439, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Do better trade logistics reduce trade costs, raising a country's exports? Yes, but the magnitude of the effect depends on country size. Applying a new gravity model to a comprehensive logistics index, we find that an average-sized country would raise exports by about 46% after a one-standard deviation improvement in logistics. Most countries are much smaller than average however, so the typical effect is only 6%. This difference is chiefly due to multilateral resistance, which stresses that bilateral trade costs relative to multilateral trade costs matter for bilateral exports. Our method also distinguishes between the effects of logistics on the intensive margin (exports per firm) and the extensive margin (the number of exporting firms) of trade.

Keywords: Logistics; Trade facilitation; Gravity; Firm heterogeneity; Multilateral resistance (search for similar items in EconPapers)
JEL-codes: F10 F13 F14 F17 O24 (search for similar items in EconPapers)
Date: 2009-07-01
New Economics Papers: this item is included in nep-cse and nep-int
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Citations: View citations in EconPapers (16)

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