Death of distance and the distance puzzle

Lin, Faqin; Sim, Nicholas

doi:10.1016/j.econlet.2012.03.004

Cited by 37 publications

(31 citation statements)

References 9 publications

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“…The same three phases, though smoothed, are still present. Our results are consistent with results from recent analysis based on improved methodologies of gravity models that show that, after the late 1970s, distances became less constraining in the WTW, hinting declining costs of transports world wide [24,25,26,27]. We performed the DFA on a different set of data with the aim of extending the analysis beyond the year 2000.…”

Section: Encoding Spatial Seriessupporting

confidence: 86%

Detecting spatial homogeneity in the World Trade Web with Detrended Fluctuation Analysis

Chiarucci

Ruzzenenti

Loffredo

2014

Physica A: Statistical Mechanics and its Applications

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In a spatially embedded network, that is a network where nodes can be uniquely determined in a system of coordinates, links’ weights might be affected by metric distances coupling every pair of nodes (dyads). In order to assess to what extent metric distances affect relationships (link’s weights) in a spatially embedded network, we propose a methodology based on DFA (Detrended Fluctuation Analysis). DFA is a well developed methodology to evaluate autocorrelations and estimate long-range behavior in time series. We argue it can be further extended to spatially ordered series in order to assess autocorrelations in values. A scaling exponent of 0.5 (uncorrelated data) would thereby signal a perfect homogeneous space embedding the network. We apply the proposed methodology to the World Trade Web (WTW) during the years 1949–2000 and we find, in some contrast with predictions of gravity models, a declining influence of distances on trading relationships

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Section: Encoding Spatial Seriessupporting

confidence: 86%

Detecting spatial homogeneity in the World Trade Web with Detrended Fluctuation Analysis

Chiarucci

Ruzzenenti

Loffredo

2014

Physica A: Statistical Mechanics and its Applications

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“…See Buch et al (2004), Carrère and Schiff (2005), Brun et al (2005), Boulhol and de Serres (2010), Lin and Sim (2012), Yotov (2012) Carrère et al (2013) and .…”

Section: Introductionmentioning

confidence: 99%

Distance, globalization, and international trade

Borchert

Yotov

2017

Economics Letters

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. For a long time globalization could be seen everywhere but in gravity estimates. We offer evidence how globalization affects manufacturing trade over the period 1986-2006 and show that, on average, the effect of distance has fallen whereas the effects of proximity and regional trade agreements have increased over time. We also document substantial cross-country heterogeneity in the extent to which distance elasticities have changed. Countries in the middle of the per-capita income distribution have seen the steepest fall in distance coefficients. At the same time, distance as a trade friction has not lost its bite for a number of low income countries, which may jeopardize their integration into global markets. We present suggestive evidence that the heterogeneous change in distance elasticities is related to secular shifts in the composition of exports. Terms of use: Documents inJEL-Codes: F130, F140, F160.Keywords: distance puzzle, missing globalization, structural gravity, poor countries. Ingo Borchert Department of EconomicsUniversity of Sussex United BN1 9SL I.Borchert@sussex.ac.uk Yoto V. Yotov School of EconomicsDrexel University USA -Philadelphia, PA 19104 yotov@drexel.edu December 18, 2016 Highlights• We offer solutions to the 'distance puzzle' and the 'missing globalization puzzle' in trade.• On average, the effect of distance on trade fell by 10% between 1986 and 2006.• The effects of globalization on trade vary widely across the 69 nations in our sample.• The relationship between the gains from globalization and income is U-shaped.• Globalization benefitted middle income countries the most.

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“…Lin and Sim (2012) provide some evidence of increasing extensive margins at longer distance but increasing intensive margins at shorter distance. However, they do not estimate any gravity equations for the two margins and therefore cannot verify how the distance coefficients on them evolve.…”

Section: Introductionmentioning

confidence: 94%

“…Carrère and Schiff (2005) and Lin and Sim (2012) suggest that using the rising coefficient for distance in year-byyear cross-country regressions as evidence of increasing impediment of geographical distance on bilateral trade could be misleading. This is because in the early period of a sample, countries farther apart are less likely to trade with each other and therefore are excluded from the estimation.…”

Section: Datamentioning

confidence: 99%

The distance effects on the intensive and extensive margins of trade over time

2015

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The empirical trade literature has long been puzzled by the finding of a large and non-decreasing distance coefficient in the gravity equation amid falling transportation costs over time. To shed new light on this puzzle, the recent theoretical literature shifts its focus to the differential effects of distance on the extensive and intensive margins of trade. However, so far there is a lack of corresponding contributions from studies of empirical gravity equations. This paper provides the first evidence using data for about 150-200 countries between the years 1980 and 2009. Extensive and intensive margins are measured based on bilateral trade data of more than 3100 product items. It is found that the distance effect on the extensive margins declines while that on the intensive margins rises over time.The same conclusion is reached when the distance effects are allowed to be sector-specific. JEL Code: F14

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Death of distance and the distance puzzle

Cited by 37 publications

References 9 publications

Detecting spatial homogeneity in the World Trade Web with Detrended Fluctuation Analysis

Detecting spatial homogeneity in the World Trade Web with Detrended Fluctuation Analysis

Distance, globalization, and international trade

The distance effects on the intensive and extensive margins of trade over time

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