Review of World Economics

, Volume 154, Issue 4, pp 745–784 | Cite as

Disentangling the impact of infrastructure on trade using a new index of infrastructure

  • Julian DonaubauerEmail author
  • Alexander Glas
  • Birgit Meyer
  • Peter Nunnenkamp
Original Paper


Making use of considerably improved measures of infrastructure, the study assesses the impact of infrastructure on bilateral trade for a panel of 150 developed and emerging economies during the period 1992–2011. The authors make use of a gravity approach to disentangle the impact of infrastructure on trade and trade costs. Improving infrastructure endowments and quality decreases trade costs and increases international trade flows. Countries with improved infrastructure reduce not only bilateral trade costs but also multilateral trade costs. The decomposition of effects indicates that better infrastructure encourages higher export flows relative to domestic trade flows. Main results of the study prove to be robust, also when considering distinct trade categories (consumption goods, intermediates, and capital goods) for a smaller sample.


Trade Gravity Infrastructure Transport ICT Energy Finance 

JEL Classification

F14 O18 


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Copyright information

© Kiel Institute 2018

Authors and Affiliations

  1. 1.Helmut Schmidt University HamburgHamburgGermany
  2. 2.Heidelberg UniversityHeidelbergGermany
  3. 3.Vienna University of Economics and BusinessViennaAustria
  4. 4.Kiel Institute for the World EconomyKielGermany

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