Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - The gravity of distance: evidence from a trade embargo
AU - Al-Malk, Afnan
AU - Maystadt, Jean-François
AU - Zanardi, Maurizio
PY - 2025/3/31
Y1 - 2025/3/31
N2 - On 5 June 2017, an airspace blockade was imposed on the State of Qatar by Bahrain, Saudi Arabia, United Arab Emirates (neighboring countries), and Egypt. We exploit this exogenous increase in air transportation costs toward non-blockading countries to examine the effect of increased travel distance, due to re-routing, on bilateral trade. Based on a gravity model estimated using a Poisson pseudo-maximum likelihood estimator, we find a distance elasticity of imports between −0.3 and −0.5. Overcoming the limitations of cross-sectional studies and taking advantage of this quasi-natural experiment, our findings are robust and revise downward previous estimates of the distance elasticity.
AB - On 5 June 2017, an airspace blockade was imposed on the State of Qatar by Bahrain, Saudi Arabia, United Arab Emirates (neighboring countries), and Egypt. We exploit this exogenous increase in air transportation costs toward non-blockading countries to examine the effect of increased travel distance, due to re-routing, on bilateral trade. Based on a gravity model estimated using a Poisson pseudo-maximum likelihood estimator, we find a distance elasticity of imports between −0.3 and −0.5. Overcoming the limitations of cross-sectional studies and taking advantage of this quasi-natural experiment, our findings are robust and revise downward previous estimates of the distance elasticity.
U2 - 10.1093/jeg/lbae033
DO - 10.1093/jeg/lbae033
M3 - Journal article
VL - 25
SP - 175
EP - 189
JO - Journal of Economic Geography
JF - Journal of Economic Geography
SN - 1468-2702
IS - 2
ER -