GEP Research Paper 13/02
Estimating The Effects of the Container Revolution on World Trade
Daniel M Bernhofen, Zouheir El-Sahli and Richard Kneller
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.
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.
Issued in February 2013
The paper is available in PDF format