Ratio Working Paper No. 201. Distance Sensitivity of Export

Abstract

Recent literature suggests that product characteristics assert diferent distance sensitivity on trade flows. But the empirical evidences still find conflicting results. Previous studies have examined the effect of distance on the export decisions across diferent product groups at the aggregate level. In this paper the analyses are executed at a disaggregated firm-product level to examine the issue based on individual firm’s decisions. Empirically, I employ a gravity model on Swedish micro-level export data in the manufacturing sector. The results suggest that homogeneous products are more sensitive to distance than differentiated products for the export selection and are insignificant for the export intensity.