The Magnitude and Distance Decay of Trade in Goods and Services: New Evidence for European Countries

Tinbergen Institute Discussion Paper 14-031/VII

40 Pages Posted: 7 Mar 2014

See all articles by Martijn J. Burger

Martijn J. Burger

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

Mark Thissen

PBL Netherlands Environmental Assessment Agency (Bilthoven)

Frank G. van Oort

University of Utrecht

Dario Diodato

Utrecht University

Date Written: March 5, 2014

Abstract

Using a newly assembled, consistent and disaggregated dataset (12 goods and 7 services) on internal and bilateral trade for 25 European countries, we analyze the difference between trade in goods and services. The measurement of both trade in goods and trade in services is improved over earlier research, allowing us to compare trade in goods and services in a coherent and systematic way. First, our data set is made consistent with the domestic demand and production and the total exports and imports at the sector and product level. Second, we explicitly control for re-exports. We find that, although goods are more often bilaterally traded than services, the volume of bilateral trade in services does not attenuate less with distance than the volume of bilateral trade in goods.

Keywords: services, goods, trade costs, Europe

JEL Classification: F10, F14

Suggested Citation

Burger, Martijn J. and Thissen, Mark and van Oort, Frank and Diodato, Dario, The Magnitude and Distance Decay of Trade in Goods and Services: New Evidence for European Countries (March 5, 2014). Tinbergen Institute Discussion Paper 14-031/VII, Available at SSRN: https://ssrn.com/abstract=2405781 or http://dx.doi.org/10.2139/ssrn.2405781

Martijn J. Burger (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burg. Oudlaan 50
Rotterdam, NL 3062 PA
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Mark Thissen

PBL Netherlands Environmental Assessment Agency (Bilthoven) ( email )

Antonie van Leeuwenhoeklaan 9
Bilthoven, 3721 MA
Netherlands

Frank Van Oort

University of Utrecht ( email )

Vredenburg 138
NL-3508 TC Utrecht, 3511 BG
Netherlands

Dario Diodato

Utrecht University ( email )

Vredenburg 138
Utrecht, 3511 BG
Netherlands

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