Do transport costs have a differential effect on trade at the sectoral level?
Abstract:This article aims to analyse the determinants of transport costs and to investigate their influence in international trade with a sample of disaggregate trade data. First, we estimate a transport-cost function using cross-section data on maritime and overland transport for four sectors: agro-industry, ceramic tiles, motor vehicle parts and accessories, and electrical and mechanical household appliances, obtained from interviews held with Spanish exporters and logistics operators in 2001. Second, we study the relationship between transport costs and trade and estimate the elasticity of trade with respect to transport costs for each sector. Important differences for high value- and low value-added sectors are observed. The trade-equation estimation shows that higher transport costs significantly deter trade, especially in high value-added sectors.
Document Type: Research Article
Affiliations: 1: Instituto de Economia Internacional and Departamento de Economia, Universidad Jaume I, Castellon, Spain and Ibero American Institute for Economic Research, Goettingen 12080, Germany 2: Instituto de Economia Internacional, Universidad de Valencia, Edificio Dep. Oriental 3-F12, Valencia, Spain 3: Instituto de Economia Internacional and Departamento de Economia, Universidad Jaume I, Campus del Riu Sec, 12080 Castellon, Spain
Publication date: 2008-12-01