Discussion paper

DP8451 Need for Speed: Is Faster Trade in the EU Trade-creating?

Timeliness has gained growing importance in international trade. This paper provides empirical evidence on the significant 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 identication. Results are cross-checked on subsamples defined 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 definitions of treatment sensitivity and treatment intensity.


Hornok, C (2011), ‘DP8451 Need for Speed: Is Faster Trade in the EU Trade-creating?‘, CEPR Discussion Paper No. 8451. CEPR Press, Paris & London. https://cepr.org/publications/dp8451