GEP 13/02: Estimating the Effects of the Container Revolution on World Trade

Summary

We exploit time and cross-sectional variation in countries’ adoption of port or railway container facilities to provide the first econometric evidence for the container revolution to be a driver of 20th century economic globalisation.

Abstract

We quantify the effects of the container revolution on a large panel of product level trade flows during 1962-1990. We exploit time and cross-sectional variation in countries’ first adoption of container facilities to construct a time-varying bilateral container technology variable and estimate its effects on trade in the panel. On North-North trade, the cumulative average treatment effects of containerization over a 20 year time period amount to about 700%, can be interpreted as causal and are larger than the standard policy liberalization variables. In a nutshell, we provide the first econometric evidence for containerization to be a driver of 20th century economic globalization.

Download the paper in PDF format

Authors

Daniel Bernhofen, Zouheir El-Sahli and Richard Kneller

View all GEP discussion papers | View all School of Economics featured discussion papers