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Bengt Söderlund . Photo

Bengt Söderlund

Senior lecturer

Bengt Söderlund . Photo

The importance of business travel for trade : Evidence from the liberalization of the Soviet airspace

Author

  • Bengt Söderlund

Summary, in English

The strong negative relationship between geographical distance and trade is not well understood. I use the liberalization of the Soviet airspace to estimate the causal impact of business travel cost on trade. The liberalization radically reduced travel time between Europe and East Asia and was followed by a significant increase in trade. I find that the cost of business travel can account for a large share of the trade frictions that cause trade to sharply decline with distance. A plausible explanation for these results is that face-to-face interaction through business travel is important for trade.

Department/s

  • Department of Economics

Publishing year

2023-11

Language

English

Publication/Series

Journal of International Economics

Volume

145

Document type

Journal article

Publisher

Elsevier

Topic

  • Economics

Keywords

  • Air travel
  • Face-to-face communication
  • Trade costs

Status

Published

ISBN/ISSN/Other

  • ISSN: 0022-1996