Part of this work was conducted when the authors were at the Department of Economics, University of Oxford, and while Behar was at the Development Economics Research Group at the World Bank. The authors thank Peter Neary, Caroline Freund, Tony Venables, Alberto Portugal-Perez, Luis Serven and Adrian Wood. Please note: the views expressed in this paper are those of the authors and not necessarily those of the Bank of England, the Monetary Policy Committee, or the Financial Policy Committee, and should not be attributed to the IMF, its Executive Board, or its management.
Exports and International Logistics*
Version of Record online: 7 AUG 2012
© 2012 The Department of Economics, University of Oxford and John Wiley & Sons Ltd
Oxford Bulletin of Economics and Statistics
Volume 75, Issue 6, pages 855–886, December 2013
How to Cite
Behar, A., Manners, P. and Nelson, B. D. (2013), Exports and International Logistics. Oxford Bulletin of Economics and Statistics, 75: 855–886. doi: 10.1111/j.1468-0084.2012.00715.x
- Issue online: 21 NOV 2013
- Version of Record online: 7 AUG 2012
- Final Manuscript Received: May 2012
Better international logistics raise a developing country's exports, but the magnitude of the effect depends on the country's size. We apply a gravity model that accounts for firm heterogeneity and multilateral resistance to an international logistics index. A one standard deviation improvement in logistics is equivalent to a 14% reduction in distance. An average-sized developing country would raise exports by approximately 36%. Most of the countries are much smaller than average, so the typical effect is 8%. This difference is chiefly due to the dampening effect of multilateral resistance, which is more important for small countries.