The Puzzling Persistence of the Distance Effect on Bilateral Trade

Centro Studi Luca d'Agliano Working Paper No. 186

Sauder School of Business Working Paper

33 Pages Posted: 11 Feb 2005

See all articles by Anne-Celia Disdier

Anne-Celia Disdier

National Institute for Agricultural Research (INRA) - UMR Economie Publique

Keith Head

University of British Columbia (UBC) - Sauder School of Business

Date Written: October 2004

Abstract

One of the best established empirical results in international economics is that bi-lateral trade decreases with distance. Although well-known, these results have not been systematically analyzed before. We examine 1052 distance effects estimated in 78 papers. Information collected on each estimate allows us to test hypotheses about causes of variation in the estimates. We focus on the question of whether distance effects have fallen over time. We find that the negative impact of distance on trade is not shrinking, but increasing slightly over the last century. This result holds even after controlling for many important differences in samples and methods.

Keywords: Shrinking world, globalization, meta-analysis

JEL Classification: C10, F10

Suggested Citation

Disdier, Anne-Celia and Head, Keith Charles, The Puzzling Persistence of the Distance Effect on Bilateral Trade (October 2004). Centro Studi Luca d'Agliano Working Paper No. 186, Sauder School of Business Working Paper, Available at SSRN: https://ssrn.com/abstract=665083 or http://dx.doi.org/10.2139/ssrn.665083

Anne-Celia Disdier (Contact Author)

National Institute for Agricultural Research (INRA) - UMR Economie Publique ( email )

Keith Charles Head

University of British Columbia (UBC) - Sauder School of Business ( email )

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