Time, Uncertainty, and Trade Flows
Ansón, José; Arvis, Jean-François; Boffa, Mauro; Helble, Matthias; Shepherd, Ben | February 2017
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.
Citation
Ansón, José; Arvis, Jean-François; Boffa, Mauro; Helble, Matthias; Shepherd, Ben. 2017. Time, Uncertainty, and Trade Flows. © Asian Development Bank Institute. http://hdl.handle.net/11540/8751.Keywords
Transport
Transportation
Trade
Trade Facilitation
Trade Potential
Trade Development
Trade Agreements
Regional Trade Integration
Regional Trade
Finance And Trade
Demand For Transport
Road & Highway Transport
Road Transportation Systems
Transport Infrastructure
Transport time
Economic integration
Energy
Import volume
Export volume
Access to markets
Economic agreements
Trade financing
Regional integration
Vehicle
Land transport
Transport economics
Railways
Infrastructure
Railroads
Roads
Trade routes
Markets
Economic goods
Economic conditions
New agricultural enterprises
Consumer goods
Road transportation
Trucking
Railroads
Roads
Trade routes
Trade flow
Show allCollapse