Work

The gravity of distance: evidence from a trade embargo

Year: 2024

Type: article

Abstract: On 5 June 2017, an airspace blockade was imposed on the State of Qatar by Bahrain, Saudi Arabia, United Arab Emirates (neighboring countries), and Egypt. We exploit this exogenous increase in air transportation costs toward non-blockading countries to examine the effect of increased travel distance, due to re-routing, on bilateral trade. Based on a gravity model estimated using a Poisson pseudo-maximum likelihood estimator, we find a distance elasticity of imports between −0.3 and −0.5. Overcoming the limitations of cross-sectional studies and taking advantage of this quasi-natural experiment, our findings are robust and revise downward previous estimates of the distance elasticity.

Source: Journal of Economic Geography

DOI: 10.1093/jeg/lbae033

Authors: Afnan Al-Malk, Jean-François Maystadt, Maurizio Zanardi

Institutions: Qatar University, Fund for Scientific Research, Lancaster University, UCLouvain, University of Sussex

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $4,664

OpenAlex ID: W4402973701

FWCI: 4.035

Cites: 27

Cited by: 6

Related to: 10