“…Recently, the international trade literature has started to employ more real measures of transport costs to examine their effects on trade (e.g. Hummels, 2001;Clark, Dollar and Micco, 2004;Hummels, Lugovskyy and Skiba, 2009;Micco and Serebrisky, 2006, and Moreira, Volpe and Blyde, 2008). Still, one shortcoming of this ongoing literature is the focus on the international component of transport costs, largely ignoring the effects of domestic transport costs on trade flows.…”