Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/163173
Authors: 
Ansón, José
Arvis, Jean-François
Boffa, Mauro
Helble, Matthias
Shepherd, Ben
Year of Publication: 
2017
Series/Report no.: 
ADBI Working Paper Series 673
Abstract: 
This paper quantifies the impact of international transport time on bilateral trade flows in goods using previously unexploited information drawn from a large dataset on international parcel delivery times. In line with previous work, we find that an extra day spent in international transit reduces bilateral trade by just under one percent at the sample median. In addition, and for the first time in the literature, we examine the impact of time-related uncertainty, which requires traders to hold costly inventories or build costly redundancies into supply chains. We find that a one day increase in international transport time uncertainty reduces bilateral trade flows by just over one percent. Splitting the sample into developing and developed countries shows that international transit time matters primarily for South-South trade, whereas uncertainty is relatively more important for North-North trade. Using new data on trade in intermediate versus final goods, we also find some evidence that time and uncertainty both matter more for movements of intermediates of the type that takes place within global value chains.
Subjects: 
Industry and trade
JEL: 
F13
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/3.0/igo/
Document Type: 
Working Paper

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