International transport costs and the margins of Intra-Latin American maritime trade.

Martínez-Zarzoso, Inmaculada and Wilmsmeier, Gordon (2010) International transport costs and the margins of Intra-Latin American maritime trade. Aussenwirtschaft, 65 (1). pp. 49-72.

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This paper focuses on the analysis of the relationship between maritime trade and transport cost in Latin America. The analysis is based on disaggregated (SITC 5 digit level) trade data for intra Latin maritime trade routes over the period 1999-2004. The research contributes to the literature by disentangling the effects of transport costs on the range of traded goods (extensive margin) and the traded volumes of goods (intensive margin) of international trade in order to test some of the predictions of the trade theories that introduce firm heterogeneity in productivity, as well as fixed costs of exporting. Recent investigations show that spatial frictions (distance) reduce trade mainly by trimming the number of shipments and that most firms ship only to geographically proximate customers, instead of shipping to many destinations in quantities that decrease in distance. Our analyses confirm these findings and show that the opposite pattern is observed for ad-valorem freight rates that reduce aggregate trade values mainly by reducing the volume of imported goods (intensive margin).

Item Type: Article
Uncontrolled Keywords: Maritime trade; transport costs; Latin America; trade routes; imported goods;
University Divisions/Research Centres: School of Engineering & the Built Environment (from 1st August 2015)
Dewey Decimal Subjects: 300 Social sciences > 380 Commerce, communications & transportation > 387 Water, air & space transportation
Library of Congress Subjects: H Social Sciences > HE Transportation and Communications
Item ID: 4207
Depositing User: Computing Research
Date Deposited: 18 Mar 2011 12:51
Last Modified: 06 Jul 2016 09:31

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