Social SciencesAgricultural EconomicsEconomicsInternational EconomicsInternational TradeInternational Trade PolicyCross-border TradeEffect On TradeGlobal TradeInternational Commodity TradeTime Delay EffectsTrade GoodsExport TimingGravity Model Of TradeHarvest Delay EffectsInternational Trade EconomicsLatency EffectsModified Gravity TheoriesNet ExportsWorld Bank Group
We determine how time delays affect international trade, using newly-collected World Bank data on the days it takes to move standard cargo from the factory gate to the ship in 126 countries. We estimate a modified gravity equation, controlling for endogeneity and remoteness. On average, each additional day that a product is delayed prior to being shipped reduces trade by at least 1 percent. Put differently, each day is equivalent to a country distancing itself from its trade partners by 70 km on average. Delays have an even greater impact on developing country exports and exports of time-sensitive goods, such as perishable agricultural products. In particular, a day's delay reduces a country's relative exports of time-sensitive to time-insensitive agricultural goods by 6 percent.
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Institutional Quality and International Trade
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