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Trade From Space: Shipping Networks and The Global Implications of Local Shocks

Author

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  • Ulltveit-Moe, Karen Helene
  • Heiland, Inga
  • Moxnes, Andreas
  • Zi, Yuan
Abstract
This paper examines the structure of the shipping network and its implications on global trade and welfare. Using novel data on the movements of container ships, we calculate optimal travel routes. We then estimate the impact of a shock to the network on global trade by means of a natural experiment: the 2016 Panama Canal expansion. Trade between country pairs using the canal increased by 9-10% after the expansion. While the building costs were borne by Panama alone, a model-based quantification shows that the welfare gains were shared by many countries, due to the network structure of shipping.

Suggested Citation

  • Ulltveit-Moe, Karen Helene & Heiland, Inga & Moxnes, Andreas & Zi, Yuan, 2019. "Trade From Space: Shipping Networks and The Global Implications of Local Shocks," CEPR Discussion Papers 14193, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14193
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    References listed on IDEAS

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    1. Feyrer, James, 2021. "Distance, trade, and income — The 1967 to 1975 closing of the Suez canal as a natural experiment," Journal of Development Economics, Elsevier, vol. 153(C).
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    5. Ducruet, César & Juhász, Réka & Nagy, Dávid Krisztián & Steinwender, Claudia, 2024. "All aboard: The effects of port development," Journal of International Economics, Elsevier, vol. 151(C).
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    7. Gordon Wilmsmeier & Jan Hoffmann, 2008. "Liner Shipping Connectivity and Port Infrastructure as Determinants of Freight Rates in the Caribbean," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 10(1-2), pages 130-151, March.
    8. Stephan Maurer & Ferdinand Rauch, 2023. "Economic geography aspects of the Panama Canal," Oxford Economic Papers, Oxford University Press, vol. 75(1), pages 142-162.
    9. Dave Donaldson & Adam Storeygard, 2016. "The View from Above: Applications of Satellite Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 171-198, Fall.
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    Citations

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    Cited by:

    1. David Gomtsyan & Alexander Tarasov, 2022. "Exporting costs and multi‐product shipments," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(4), pages 990-1023, October.
    2. Stamer, Vincent, 2022. "Thinking Outside the Container: A Sparse Partial Least Squares Approach to Forecasting Trade Flows," VfS Annual Conference 2022 (Basel): Big Data in Economics 264096, Verein für Socialpolitik / German Economic Association.
    3. Andreas Baur & Lisandra Flach & Jasmin Katrin Gröschl, 2021. "Containerschifffahrt in stürmischen Zeiten – Analyse und Ausblick," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 74(05), pages 59-65, May.
    4. Ito, Keiko & Ikeuchi, Kenta & Criscuolo, Chiara & Timmis, Jonathan & Bergeaud, Antonin, 2023. "Global value chains and domestic innovation," Research Policy, Elsevier, vol. 52(3).
    5. Geoffrey R. Dunbar & Walter Steingress & Ben Tomlin, 2023. "Climate Variability and International Trade," Staff Working Papers 23-8, Bank of Canada.
    6. Ignatenko, Anna, 2024. "Competition and Price Discrimination in International Transportation," Discussion Paper Series in Economics 6/2024, Norwegian School of Economics, Department of Economics.
    7. Alexander Sandkamp & Vincent Stamer & Shuyao Yang, 2022. "Where has the rum gone? The impact of maritime piracy on trade and transport," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(3), pages 751-778, August.
    8. Ardelean,Adina Teodora & Lugovskyy,Volodymyr & Skiba,Alexandre & Terner,David Michael, 2022. "Fathoming Shipping Costs : An Exploration of Recent Literature, Data, and Patterns," Policy Research Working Paper Series 9992, The World Bank.
    9. Woan Foong Wong & Simon Fuchs, 2022. "Multimodal Transport Networks," FRB Atlanta Working Paper 2022-13, Federal Reserve Bank of Atlanta, revised Oct 2024.
    10. Bai, Xiwen & Ma, Zhongjun & Zhou, Yaoming, 2023. "Data-driven static and dynamic resilience assessment of the global liner shipping network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    11. Li, Weijun & Bai, Xiwen & Yang, Dong & Hou, Yao, 2023. "Maritime connectivity, transport infrastructure expansion and economic growth: A global perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 170(C).

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    More about this item

    Keywords

    Shipping networks; Trade;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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