蝌蚪网 Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
The Round Trip Effect: Endogenous Transport Costs and International Trade
蝌蚪网 Journal: Applied Economics
vol. 14,
no. 4, October 2022
(pp. 127–66)
Abstract
Container ships travel between a fixed set of origins and destinations in round trips, inducing a negative correlation in their freight rates. I study the implications of this round trip effect on international trade and trade policy. I identify this effect and develop an instrument using it to estimate the impact of transport costs on trade. I simulate counterfactual import tariff increases in a quantitative model and quantify the importance of endogenizing transport costs with respect to this effect: an exogenous transport costs model predicts a trade balance improvement from protectionist policies, while the round trip model finds the opposite.Citation
Wong, Woan Foong. 2022. "The Round Trip Effect: Endogenous Transport Costs and International Trade." 蝌蚪网 Journal: Applied Economics 14 (4): 127–66. DOI: 10.1257/app.20190721Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- F13 Trade Policy; International Trade Organizations
- F14 Empirical Studies of Trade
- L92 Railroads and Other Surface Transportation
- R41 Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise