The current debate on globalization has raised an important question for economists: Is the world really becoming a ‘global village’ with a ‘weightless economy’? In accordance with Cairncross’s best-selling book The Death of Distance (2001) some economists have argued that falling transportation and communication costs are leaving ‘distance’ a negligible factor in the assessment of barriers to trade and integration of the world economies. Yet there is not enough funded evidence for this. Recent studies on the importance of education suggest that knowledge, as the ‘basic commodity’ of the 21st century and major source of future growth, makes industries and thus trade more independent of traditional physical fetters. On the contrary, it is not clear to what extent transportation costs have generally declined. Moreover it is uncertain whether the decline in shipping costs affects distant and proximate transport equally. An emerging literature is trying to give consistent explanations for the puzzling persistence of the distance effect on trade flows and economic development. In this essay we will discuss some of the evidence found so far, that distance is still ‘alive’.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Distance is still ‘alive': evidence from three examples
- The puzzling persistence of the distance effect on bilateral trade
- The distance decay in international trade patterns
- The Canada - U.S. border puzzle
- Implications and Conclusions
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This essay explores the ongoing relevance of distance in the context of globalization and its implications for economic development. The author challenges the notion of a 'weightless economy' and argues that distance continues to play a significant role in international trade and integration. The essay uses evidence from several studies to demonstrate that distance effects have actually intensified in recent decades.
- Persistence of Distance Effects in Trade
- Impact of Distance on Economic Development
- Importance of Transportation Costs
- Role of Technological Advancements
- Challenges to Globalization and Global Village Concept
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: The author introduces the concept of globalization and its implications for the importance of distance. They argue that while advancements in transportation and communication have reduced costs, distance still significantly impacts trade and integration.
- Distance is still ‘alive': evidence from three examples: This section explores evidence from three examples to demonstrate the persistence of the distance effect in trade. The author examines studies on bilateral trade, distance decay in international trade patterns, and the Canada-U.S. border puzzle. The analysis indicates that distance barriers have increased in recent decades, particularly in the 1990s. This section highlights the importance of transportation costs and infrastructure for economic development.
Schlüsselwörter (Keywords)
The essay delves into the key concepts of globalization, distance effects, international trade, transportation costs, economic development, and the gravity model. It focuses on the persistence of the distance effect on bilateral trade, distance decay in international trade patterns, and the Canada-U.S. border puzzle as examples of the ongoing importance of distance in economic systems.
- Quote paper
- Arturo Minet (Author), 2007, We are living in an era of globalisation, yet there is evidence that distance still matters, and increasingly so, Munich, GRIN Verlag, https://www.grin.com/document/77371
