The tyranny of distance and the gravity of resources

Robertson, Peter E.; Robitaille, Marie-Claire

Abstract

To what extent does geography remain an important determinant of comparative advantage and factor incomes in resource markets? We estimate gravity models for resources and find that some minerals and fuels, particularly Iron Ore and Gas, do have very high elasticities of trade with respect to distance. To assess the implications of this we then consider a simple counterfactual where location advantages are eliminated. We find that for a few countries, including Australia and New Zealand, distance barriers have a large impact of their market share.

Citation

Robertson, P. E., & Robitaille, M.-C. (in press). The tyranny of distance and the gravity of resources. Economic Record, https://doi.org/10.1111/1475-4932.12368

• Journal Article Type: Article
• Acceptance Date: Jan 1, 2017
• Online Publication Date: Aug 30, 2017
• Deposit Date: Nov 15, 2017
• Publicly Available Date: Aug 31, 2019
• Journal: Economic Record
• Print ISSN: 0013-0249
• Electronic ISSN: 1475-4932
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1111/1475-4932.12368
• Keywords: Energy, Geography, Gravity Model, International Trade, Resources.
• Public URL: https://nottingham-repository.worktribe.com/output/879556
• Publisher URL: https://doi.org/10.1111/1475-4932.12368
• Related Public URLs: http://onlinelibrary.wiley.com/doi/10.1111/1475-4932.12368/full
• Additional Information: This is the peer reviewed version of the following article: Robertson, P. E. and Robitaille, M.-C. (2017), The Tyranny of Distance and the Gravity of Resources. Econ Rec. doi:10.1111/1475-4932.12368, which has been published in final form at: http://onlinelibrary.wiley.com/doi/10.1111/1475-4932.12368/abstract. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
• Contract Date: Nov 15, 2017