Freight rates and the margins of intra-Latin American maritime trade

Arbeitspapier

This paper focuses on the analysis of the relationship between maritime trade and transport cost in Latin America. The data available are disaggregated (SITC 5 digit level) maritime trade flows on trade routes within Latin America over the period 1999-2004. The contribution to the literature is to disentangle the effects that transport costs have on the extensive margin (number of products imported) and the intensive margin (quantity imported of each product) 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 reducing 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 findings confirm this result for intra-LA trade and show that the opposite pattern is observed for ad-valorem freight rates that reduce aggregate trade values mainly by reducing the quantity imported (intensive margin).

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IAI Discussion Papers ; No. 201

Classification and Topics

• Classification: Wirtschaft ; Trade: General
• Subject: Transport costs ; Maritime trade ; Latin America ; Sectoral data ; Competitiveness ; Seefrachtverkehr ; Gütertarif ; Transportkosten ; Internationale Wirtschaftsbeziehungen ; Lateinamerika

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Martínez-Zarzoso, Inmaculada ; Wilmsmeier, Gordon
• Event: Veröffentlichung
• (who): Georg-August-Universität Göttingen, Ibero-America Institute for Economic Research (IAI)
• (where): Göttingen
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/57304
• Last update: 10.03.2025, 11:44 AM CET