Exports and international logistics, Vol. 1 of 1

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Exports and international logistics

Author:	Behar, Alberto; Manners, Phil; Nelson, Benjamin;	Collection Title:	Policy Research working paper ; no. WPS 5691
Country:	World;	Date Stored:	2011/06/20
Document Date:	2011/06/01	Document Type:	Policy Research Working Paper
Language:	English	Region:	The World Region
Report Number:	WPS5691	SubTopics:	Common Carriers Industry; Economic Theory & Research; Free Trade; Trade Policy; Trade Law
Volume No:	1 of 1

Summary: Do better international logistics reduce trade costs, raising a developing country's exports? Yes, but the magnitude of the effect depends on the country's size. The authors apply a gravity model that accounts for firm heterogeneity and multilateral resistance to a comprehensive new international logistics index. A one-standard deviation improvement in logistics is equivalent to a 14 percent reduction in distance. An average-sized developing country would raise exports by about 36 percent. Most countries are much smaller than average however, so the typical effect is 8 percent. This difference is chiefly due to multilateral resistance: it is bilateral trade costs relative to multilateral trade costs that matter for bilateral exports, and multilateral resistance is more important for small countries.


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