Journal Article
Trade From Space: Shipping Networks and The Global Implications of Local Shocks
The Review of Economics and Statistics, published online
Authors
Publication Date
DOI
JEL Classification
F12
F14
L92
Key Words
Related Topics
International Trade
This paper analyzes international externalities of a local shock to the global shipping network. The 2016 Panama Canal expansion removed a bottleneck in seaborne transportation. Using reduced-form and structural methods in combination with novel satellite data on ships, we find that trade increased significantly among country-pairs using the canal. We find that the global real income gains from the canal expansion were over three times greater than the income gains for Panama itself. A link removal analysis reveals that most shipping links are associated with positive and quantitatively important positive international externalities.
