GTAP Resources: Resource Display
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"Grounded! The Impact of Disrupted Transport Networks on International Trade " by Nitsch, Volker Abstract Recently, there has been a growing interest in the effects of trade disruptions. Cross-border trade may drop suddenly and sharply for widely unexpected reasons, such as terrorist attacks, strikes (e.g., in major ports), weather extremes, disasters or financial turbulences. In this paper, I examine a natural experiment that allows analyzing the effects of such events on international trade. In April 2010, the eruption of the Eyjafjallajökull volcano led to a week-long closure of European airspace. Some 100,000 flights were cancelled, and the journeys of 10 million passengers were grounded. This paper examines patterns of trade adjustment when transport networks are (temporarily) disrupted. Analyzing monthly trade of European countries at highly disaggregated product level, I empirically characterize the responsiveness of trade along the intensive and the extensive margin as well as the speed of trade adjustment. Specifically, I explore the evolution of monthly bilateral trade values and quantities of 27 EU member countries with more than 200 partner countries at the 8-digit level (which yields about 7 million observations per month), using the share of flights cancelled in April 2010 as well as the trading partners distance from Iceland as identifying variables. While I find no effect of the eruption of the volcano in aggregate trade data (which may not be too surprising in view of the low share of air transportation in total trade), there are measurable effects observable in product-level trade. However, these effects turn out to be generally very short-lived. ... |
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- Economic growth - Domestic policy analysis - Other data bases and data issues - European Union |
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Public Access  GTAP Resource 4512 (236.3 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
