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The Origins of Spatial Interaction

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  • Wolfgang Keller
  • Carol H. Shiue

Abstract

Geography shapes economic outcomes in a major way. This paper uses spatial empirical methods to detect and analyze trade patterns in a historical data set 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

  • Wolfgang Keller & Carol H. Shiue, 2003. "The Origins of Spatial Interaction," NBER Working Papers 10069, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:10069
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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