Trading on Time

39 Pages Posted: 5 Apr 2006

See all articles by Simeon Djankov

Simeon Djankov

London School of Economics & Political Science (LSE); Peter G. Peterson Institute for International Economics

Caroline L. Freund

World Bank - Macro, Trade and Investment

Cong S. Pham

Deakin University, School of Accounting, Economics and Finance

Date Written: April 2006

Abstract

We determine how time delays affect international trade, using newly-collected World Bank data on the days it takes to move standard cargo from the factory gate to the ship in 126 countries. We estimate a modified gravity equation, controlling for endogeneity and remoteness. On average, each additional day that a product is delayed prior to being shipped reduces trade by at least 1 percent. Put differently, each day is equivalent to a country distancing itself from its trade partners by 70 km on average. Delays have an even greater impact on developing country exports and exports of time-sensitive goods, such as perishable agricultural products. In particular, a day's delay reduces a country's relative exports of time-sensitive to time-insensitive agricultural goods by 6 percent.

Keywords: Trade facilitation

JEL Classification: F13, F23

Suggested Citation

Djankov, Simeon and Freund, Caroline L. and Pham, Cong S., Trading on Time (April 2006). World Bank Policy Research Working Paper No. 3909. Available at SSRN: https://ssrn.com/abstract=894927

Simeon Djankov (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

Caroline L. Freund

World Bank - Macro, Trade and Investment ( email )

1818 H Street, N.W.
MC3-329
Washington, DC 20433
United States
(202)458-0847 (Phone)

HOME PAGE: http://econ.worldbank.org/staff/cfreund

Cong S. Pham

Deakin University, School of Accounting, Economics and Finance ( email )

75 Pigdons Road
Victoria, Victoria 3216
Australia

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