2016

Heterogeneous Firms, Globalisation and the Distance Puzzle

Särtryck nr 2016:47

Författare: Mario Larch, Pehr-Johan Norbäck, Steffen Sirries och Dieter M. UrbanÅr: 2016 Publikation: World Economy Årgång (nr): 39 (9) Sidor: 1307–1338
Artikeln online (behörighet kan krävas)
Preliminär version


Despite the strong pace of globalisation, the distance effect on trade is persistent or even growing over time (Disdier and Head, 2008). To solve this distance puzzle, we use the recently developed gravity equation estimator from Helpman et al. (2008) (HMR henceforth). Using three different data sets, we find that the distance coefficient increases over time when ordinary least squares (OLS) is used, while the non-linear estimation of HMR leads to a decline in the distance coefficient over time. The distance puzzle, thus, arises from a growing bias of OLS estimates. The latter is explained by an increase in the importance of the bias from omitting the number of heterogeneous exporting firms relative to the bias from omitting zero trade flows. Furthermore, we show that including zero trade flows cannot solve the distance puzzle when using HMR. The HMR estimates are strongly correlated with the time pattern in freight costs reported by Hummels (2007).


Referens:
Larch, Mario, Pehr-Johan Norbäck, Steffen Sirries och Dieter M. Urban (2016), "Heterogeneous Firms, Globalisation and the Distance Puzzle". World Economy 39(9), 1307–1338.

Pehr-Johan Norbäck

Kontakt

Tel: 08 665 4522
Mobil: 073 547 3379
pehr-johan.norback@if...

Aktuell forskare

Martin Ljunge

Forskningsområden: Socialekonomi, offentlig ekonomi och arbetsmarknadsekonomi.

Några av de frågor Martin Ljunge försöker besvara i sin forskning:

  • Hur påverkar tillit individers hälsa och välstånd?
  • Har välfärdsstaten långsiktiga effekter på beteenden?

IFN kalendarium

Institutet för Näringslivsforskning, Grevgatan 34 - 2 tr, Box 55665, SE-102 15 Stockholm, Sweden | Tel: +46-(0)8-665 45 00 | info@ifn.se