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Trading on Time

Author

Listed:
  • Simeon Djankov

    (Ministry of Finance, Bulgaria)

  • Caroline Freund

    (Research Department, World Bank)

  • Cong S. Pham

    (School of Accounting, Economics and Finance, Deakin University)

Abstract

We determine how time delays affect trade, using newly collected data on the days it takes to move standard cargo from the factory gate to the ship in 98 countries. We estimate a difference gravity equation and find that each additional day that a product is delayed prior to being shipped reduces trade by more than 1%. Put differently, each day is equivalent to a country distancing itself from its trade partners by about 70 km on average. We also find that delays have a relatively greater impact on exports of time-sensitive goods, such as perishable agricultural products. © 2010 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. "Trading on Time," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.
    • Handle: RePEc:tpr:restat:v:92:y:2010:i:1:p:166-173
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    References listed on IDEAS

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