Fly the Unfriendly Skies: The role of transport costs in gravity models of trade
Title: | Fly the Unfriendly Skies: The role of transport costs in gravity models of trade |
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Format: | Journal Article |
Publication Date: | November 2024 |
Published In: | Journal of International Economics |
Description: | We exploit exogenous shocks to flight distances over time to estimate the distance effect in airborne trade within panel regressions. We find a negative distance effect, which we interpret as evidence of a link between transportation costs and airborne trade. Notably, this relationship is driven almost entirely by changes at the extensive margin. Specifically, trade in HS 6 product categories with intermittent trading histories becomes dormant when flight distances increase. Conversely, the intensive margin of trade remains largely unaffected. |
Ivan Allen College Contributors: | |
External Contributors: | Jing Chu and Antu Panini Murshid |
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