Publication: Exports and International Logistics
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Published
2011-06-01
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Date
2012-03-19
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Abstract
Do better international logistics reduce trade costs, raising a developing country's exports? Yes, but the magnitude of the effect depends on the country's size. The authors apply a gravity model that accounts for firm heterogeneity and multilateral resistance to a comprehensive new international logistics index. A one-standard deviation improvement in logistics is equivalent to a 14 percent reduction in distance. An average-sized developing country would raise exports by about 36 percent. Most countries are much smaller than average however, so the typical effect is 8 percent. This difference is chiefly due to multilateral resistance: it is bilateral trade costs relative to multilateral trade costs that matter for bilateral exports, and multilateral resistance is more important for small countries.
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“Behar, Alberto; Manners, Phil; Nelson, Benjamin. 2011. Exports and International Logistics. Policy Research working paper ; no. WPS 5691. © World Bank. http://hdl.handle.net/10986/3455 License: CC BY 3.0 IGO.”
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