DP8451 Need for Speed: Is Faster Trade in the EU Trade-creating?
| Author(s): | Cecília Hornok |
| Publication Date: | June 2011 |
| Keyword(s): | difference-in-difference-in-differences estimation, EU enlargement, time cost of trade, transport mode choice, treatment intensity |
| JEL(s): | F13, F14, F15 |
| Programme Areas: | International Trade and Regional Economics |
| Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=8451 |
Timeliness has gained growing importance in international trade. This paper provides empirical evidence on the signi ficant cost of time in trade by exploiting the quasi-experimental nature of the European Union (EU) enlargement in 2004. It applies a difference-in-difference-in-differences econometric strategy on a European industry-level database of bilateral trade barriers, where industries are differentiated according to their time sensitivity. The use of a treatment intensity indicator that captures the decline in the waiting time at borders supports the identi cation. Results are cross-checked on subsamples de fined along transport mode choice probabilities, where intra-EU transport mode choice projections are obtained from an estimated discrete choice model on extra-EU trade. Robustness checks experiment with alternative de finitions of treatment sensitivity and treatment intensity.