The importance of business travel for trade : Evidence from the liberalization of the Soviet airspace
(2023) In Journal of International Economics 145.- Abstract
The strong negative relationship between geographical distance and trade is not well understood. I use the liberalization of the Soviet airspace to estimate the causal impact of business travel cost on trade. The liberalization radically reduced travel time between Europe and East Asia and was followed by a significant increase in trade. I find that the cost of business travel can account for a large share of the trade frictions that cause trade to sharply decline with distance. A plausible explanation for these results is that face-to-face interaction through business travel is important for trade.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/ae21837e-e6aa-4886-9465-96e982535b8d
- author
- Söderlund, Bengt LU
- organization
- publishing date
- 2023-11
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Air travel, Face-to-face communication, Trade costs
- in
- Journal of International Economics
- volume
- 145
- article number
- 103812
- publisher
- Elsevier
- external identifiers
-
- scopus:85171691571
- ISSN
- 0022-1996
- DOI
- 10.1016/j.jinteco.2023.103812
- language
- English
- LU publication?
- yes
- id
- ae21837e-e6aa-4886-9465-96e982535b8d
- date added to LUP
- 2023-12-06 15:03:46
- date last changed
- 2023-12-06 15:04:02
@article{ae21837e-e6aa-4886-9465-96e982535b8d,
abstract = {{<p>The strong negative relationship between geographical distance and trade is not well understood. I use the liberalization of the Soviet airspace to estimate the causal impact of business travel cost on trade. The liberalization radically reduced travel time between Europe and East Asia and was followed by a significant increase in trade. I find that the cost of business travel can account for a large share of the trade frictions that cause trade to sharply decline with distance. A plausible explanation for these results is that face-to-face interaction through business travel is important for trade.</p>}},
author = {{Söderlund, Bengt}},
issn = {{0022-1996}},
keywords = {{Air travel; Face-to-face communication; Trade costs}},
language = {{eng}},
publisher = {{Elsevier}},
series = {{Journal of International Economics}},
title = {{The importance of business travel for trade : Evidence from the liberalization of the Soviet airspace}},
url = {{http://dx.doi.org/10.1016/j.jinteco.2023.103812}},
doi = {{10.1016/j.jinteco.2023.103812}},
volume = {{145}},
year = {{2023}},
}