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The Origins of Spatial Interaction

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  • Keller, Wolfgang
  • Shiue, Carol

Abstract

Geography shapes economic outcomes in a major way. This Paper uses spatial empirical methods to detect and analyse trade patterns in a historical dataset on Chinese rice prices. Our results suggest that spatial features were important for the expansion of interregional trade. Geography dictates, first, over what distances trade was possible in different regions, because the costs of ship transport were considerably below those for land transport. Spatial features also influence the direction in which a trading network is expanding. Moreover, our analysis captures the impact of new trade routes both within and outside the trading areas. We also discuss the long-run implications this might have.

Suggested Citation

  • Keller, Wolfgang & Shiue, Carol, 2003. "The Origins of Spatial Interaction," CEPR Discussion Papers 4138, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4138
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    More about this item

    Keywords

    Geography; Spatial autocorrelation; Spatial econometrics; 18th century china; Trade; Transport costs; River transport; Coastal transport; R40;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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