The impact of technological change on new trade: Evidence from the container revolution

Abstract

We estimate the impact of the container revolution on new trade in temperature-sensitive products. Our identification strategy is justified by a historical narrative suggesting that the containerization of bilateral trading routes was exogenous to the occurrence of new trade in temperature-sensitive products because their small trade volumes made them inconsequential for the adoption of the container technology. Employing product-level data on containerizability, our benchmark estimates imply that containerization caused an increase in the likelihood of new trade in temperature-sensitive products in the orders of 2.4% between 1964 and 1973 and 7.5% between 1964 and 1983.