The Puzzling Persistence of the Distance Effect on Bilateral Trade

By Anne‐Célia Disdier, Keith Head. Review of Economics and Statistics, 2008

1,306 citations recorded by the source corpus.

One of the best-established empirical results in international economics is that bilateral trade decreases with distance. Although well known, this result has not been systematically analyzed before. We examine 1,467 distance effects estimated in 103 papers. Information collected on each estimate allows us to test hypotheses about the causes of variation in the estimates. Our most interesting finding is that the estimated negative impact of distance on trade rose around the middle of the century and has remained persistently high since then. This result holds even after controlling for many important differences in samples and methods.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/2973586692d31a3555fac23bfbd89aa8ef5f1b4a

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

Citations in the corpus

Domestic Trade Frictions and Agriculture (2015, background): “Finally, unlike Donaldson (2015), who integrates the Ricardian model of Eaton and Kortum (2002) with Indian regional trade data, my model yields predictions for land shares across crops; this allows me to make contact with land use data, which is more widely available than data on within-country tra”
Tariffs and non-tariff frictions in the world wine trade (2016, background): “Compared to the literature on the gravity model (Disdier and Head, 2008), we found that physical distance has a limited impact on the wine trade.”
The chilling trade effects of antidumping proliferation (2010, background): “With a dynamic specification, the estimated coefficients can be interpreted as short run elasticities and the values of the coefficients are in general smaller than in static gravity models (Disdier and Head, 2008).”
Multinationals' Profit Response to Tax Differentials: Effect Size and Shifting Channels (2017, neutral): “6 Following a standard convention in the meta-analysis literature (e.g. Disdier and Head, 2008; Havranek and Irsova, 2011; Feld et al., 2013), we try to sample all tax effect estimates reported in these studies.6 Discarding information would be inefficient.”
Foreign Direct Investment and Economic Growth: a Real Relationship or Wishful Thinking? (2015, methodology): “…known asmeta-regression analysis (MRA), has been adopted by a growingnumber of papers to shed light on several important issues (e.g., Card and Krueger, 1995; Disdier and Head, 2008; Doucouliagos and Ulubasoglu, 2008; Görg and Strobl, 2001; Havranek and Irsova, 2011; Irsova and Havranek, 2013).”
'Dual' Gravity: Using Spatial Econometrics to Control for Multilateral Resistance (2007, background): “Substituting (17) into (15) then yields the following estimating equation:”
Economic Integration Agreements, Border Effects, and Distance Elasticities in the Gravity Equation (2015, neutral): “…empirical evidence suggests that the distance elasticity of bilateral international trade has not declined, as established in the Disdier and Head (2008) meta analysis of the distance elasticity.4 While some authors have o ered alternative explanations, they have met mixed success (cf.,…”
North, South and Distance in the Gravity Model (2007, positive): “As mentioned earlier, Disdier and Head (2004) find this rise in the influence of distance to be a basic result in their meta-analysis of 78 earlier papers.”
A meta-analysis of estimates of urban agglomeration economies (2009, methodology): “Previous meta-analyses using this specification include Jeppesen et al. (2002), Nitsch (2005), and Disdier and Head (2008).”