Time, uncertainty, and trade flows

Arbeitspapier

This paper quantifies the impact of international transport time on bilateral trade flows in goods using previously unexploited information drawn from a large dataset on international parcel delivery times. In line with previous work, we find that an extra day spent in international transit reduces bilateral trade by just under one percent at the sample median. In addition, and for the first time in the literature, we examine the impact of time-related uncertainty, which requires traders to hold costly inventories or build costly redundancies into supply chains. We find that a one day increase in international transport time uncertainty reduces bilateral trade flows by just over one percent. Splitting the sample into developing and developed countries shows that international transit time matters primarily for South-South trade, whereas uncertainty is relatively more important for North-North trade. Using new data on trade in intermediate versus final goods, we also find some evidence that time and uncertainty both matter more for movements of intermediates of the type that takes place within global value chains.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ADBI Working Paper ; No. 673

Classification and Topics

• Classification: Wirtschaft ; Trade Policy; International Trade Organizations
• Subject: Industry and trade

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ansón, José ; Arvis, Jean-François ; Boffa, Mauro ; Helble, Matthias ; Shepherd, Ben
• Event: Veröffentlichung
• (who): Asian Development Bank Institute (ADBI)
• (where): Tokyo
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/163173
• Last update: 10.03.2025, 11:43 AM CET