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Groningen Growth and Development Centre

Faculty of Economics and Business
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Distance drives services trade too

Date:24 September 2018
The impact of distance on trade
The impact of distance on trade

Today, the Financial Times reports on new research by Jonathan Eaton (U. of Pennsylvania) and Samuel Kortum (Yale) using data from the World Input Output Database. Eaton and Kortum find that trade volumes in services is heavily affected by distance. So if, due to Brexit, trade barriers to services trade increase, the resulting decline in trade would be hard to compensate with higher trade further abroad.

Tags: Press, WIOD