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Product Heterogeneity, Intangible Barriers and Distance Decay: The Effect of Multiple Dimensions of Distance on Trade across Different Product Categories

Author

Listed:
  • Maureen B.M. Lankhuizen

    (VU University Amsterdam)

  • Thomas de Graaff

    (VU University Amsterdam)

  • Henri L.F. de Groot

    (VU University Amsterdam, and Ecorys NEI)

Abstract

This discussion paper resulted in a publication in 'Spatial Economic Analysis' . We empirically examine the heterogeneity in the effects of multiple dimensions of distance on trade across detailed product groups. Using finite mixture modeling on bilateral trade data at the 3-digit SITC level, we endogenously group product categories into an, a priori unknown, number of segments based on estimated coefficients of multiple dimensions of distance in the gravity equation. We find that institutional distance, whether countries belong to the same trade block and especially geographical distance are crucial and distinct factors to classify commodities in homogeneous groups.

Suggested Citation

  • Maureen B.M. Lankhuizen & Thomas de Graaff & Henri L.F. de Groot, 2012. "Product Heterogeneity, Intangible Barriers and Distance Decay: The Effect of Multiple Dimensions of Distance on Trade across Different Product Categories," Tinbergen Institute Discussion Papers 12-065/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20120065
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    Citations

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    Cited by:

    1. Jienwatcharamongkhol, Viroj, 2012. "Distance Sensitivity of Export: A Firm-Product Level Approach," Working Papers 2012:33, Lund University, Department of Economics.
    2. Viroj Jienwatcharamongkhol, 2014. "Distance Sensitivity of Export: A Firm-Product Level Approach," Journal of Industry, Competition and Trade, Springer, vol. 14(4), pages 531-554, December.
    3. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.
    4. Xinran Liu, 2019. "Effects of Multiple Dimensions of Intangible Distance on Agro-food Exports: Evidence from China," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(12), pages 1-75, December.
    5. Hans Gersbach & Hans Haller, 2018. "Hierarchical Trade," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1165-1184, April.
    6. Lankhuizen, Maureen & Boonstra, Harm Jan & de Blois, Chris, 2020. "Unpacking freight – Identifying conditions driving regional freight transport in statistics," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 415-435.
    7. Jienwatcharamongkhol, Viroj, 2012. "Distance Sensitivity of Export: A Firm-Product Level Approach," Ratio Working Papers 201, The Ratio Institute.

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    More about this item

    Keywords

    bilateral trade; gravity models; distance; institutions; product heterogeneity; finite mixture modeling;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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