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    The Gravity of Distance: Evidence from a Trade embargo

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    Date
    2021
    Author
    Al-Malk, Afnan
    Maystadt, Jean-Francois
    Zanardi, Maurizio
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    Abstract
    On June 5, 2017, an airspace blockade was imposed on the State of Qatar by four of its neighbors: Saudi Arabia, Bahrain, United Arab Emirates, and Egypt. We study the exogenous increase in air transportation costs with non-blockading countries to examine the effect of increased travel distance on bilateral trade. Based on a gravity model estimated with a Poisson pseudo-maximum likelihood, we find a distance elasticity of trade between -0.3 and -0.5. Our findings revise downwards cross-sectional estimates of the distance elasticity of trade and confirm more recent estimates exploiting similar time-varying shocks to distance.
    URI
    https://doi.org/10.29117/quarfe.2021.0171
    DOI/handle
    http://hdl.handle.net/10576/24457
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    • Theme 4: Social Sciences and Humanities [‎35‎ items ]

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