Distance drives services trade too
|Date:||24 September 2018|
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.