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Differing trade elasticities for intra‐ and international distances: A gravity approach

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  • Jason Query

Abstract

Using the gravity model of trade, I estimate the impact that within‐country transportation distance has on international trade levels. Combining multiple data sets, I create a measure for the distance U.S. agricultural goods travel before leaving the country. In order to account for endogeneity in production location choice, I use potential agricultural production as an instrument for actual agricultural production. I find that internal distance is statistically significant and large in magnitude. A 10% reduction in the distance a good travels within the exporting country increases trade by roughly 3%.

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  • Jason Query, 2020. "Differing trade elasticities for intra‐ and international distances: A gravity approach," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 913-929, August.
    • Handle: RePEc:bla:reviec:v:28:y:2020:i:3:p:913-929
    DOI: 10.1111/roie.12475
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    References listed on IDEAS

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    Cited by:

    1. Yilmazkuday, Hakan, 2012. "Understanding interstate trade patterns," Journal of International Economics, Elsevier, vol. 86(1), pages 158-166.
    2. Kamalbek Karymshakov & Burulcha Sulaimanova, 2021. "The impact of infrastructure on trade in Central Asia," Asia Europe Journal, Springer, vol. 19(1), pages 5-20, December.
    3. Jason Query & Jon C. Thompson, 2024. "Cultural Distance and International Trade," Open Economies Review, Springer, vol. 35(2), pages 283-300, April.
    4. Lirong Xing & Xiaomiao Yin & Chuanxiang Cao & Ehsan Elahi & Taoyuan Wei, 2022. "The Impact of Multidimensional Distance on Agricultural Exports: Evidence from China Based on the Technological Added Value," Sustainability, MDPI, vol. 15(1), pages 1-17, December.

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