Essays in export transaction costs
2017-03-01T04:46:40Z (GMT) by
All three chapters of my dissertation belong to the general topic of transaction costs to export. In chapter 1 we explore empirically how export delays and export monetary costs relate over time. We find evidence that suggest that countries increase pecuniary exports costs to fund innovations that decrease export delay. This implies that international organisations' singular preoccupation with export delays (at the exclusion of export costs) has the potential to retard rather than facilitate the cause of globalisation. The study also shows how domestic delays and monetary costs to export affect the volume of trade, with special focus on developing countries. Our main findings suggest that export delays are not as significant for developing countries as previously thought, while pecuniary costs - largely neglected in the literature, have a significant negative effect on how much countries trade. Anecdotal evidence in the form of countries’ self-declarations and the statistical evidence provided in Chapter 1 suggest that the monetary costs generated by governmental initiatives to reduce export delays are largely transferred to exporters. However, it is unclear why governments choose this course of action, given that increasing export pecuniary costs hinders trade. To shed relevant light, in the second chapter we provide one theoretical explanation. In our model the government objective is to maximise social welfare. We show that, by passing the costs of reductions in delays to exporting firms, governments generate market incentives that optimise economic efficiency. The third chapter complements chapters 1 and 2 by examining the impact of export time sensitivity across industries on the patterns of trade. My findings show evidence in support of the hypothesis that, in the last decades, the supply of exports in more time sensitive industries tended to agglomerate near the demand centre. The study also shows evidence of an increase in the share of time sensitive industries in total trade. These results may be explained by the recent introduction of new technologies, which have not only increased the demand for timeliness in trade but have also facilitated the international commercialisation of time sensitive products. The geographical agglomeration effect of time sensitivity coupled with the relative growth of trade in time sensitive industries may explain, at least in part, the fact that the average negative effect of distance on trade, in spite of recent improvements in transportation and communication technologies, has not declined, and may have even strengthened over time. Finally, my findings show that, independently of their geographical location, high-income countries not only tend to specialise in the production of time sensitive industries but also that this pattern of specialisation is consolidating over time.