Trade From Space: Shipping Networks and The Global Implications of Local Shocks

Inga Heiland; Andreas Moxnes; Karen Helene Ulltveit-Moe; Yuan Zi

doi:10.1162/rest.a.267

Trade From Space: Shipping Networks and The Global Implications of Local Shocks

Inga Heiland¹; Andreas Moxnes²; Karen Helene Ulltveit-Moe³; Yuan Zi⁴

¹ NTNU & University of Oslo & CEPR & IfW Kiel [email protected] · ² BI Norwegian School of Business & CEPR [email protected] · ³ University of Oslo & CEPR [email protected] · ⁴ The Graduate Institute Geneva & University of Oslo & CEPR [email protected]

The Review of Economics and Statistics 2025

This paper analyzes international externalities of a local shock to the global shipping network. The 2016 Panama Canal expansion removed a bottleneck in seaborne transportation. Using reduced-form and structural methods in combination with novel satellite data on ships, we find that trade increased significantly among country-pairs using the canal. We find that the global real income gains from the canal expansion were over three times greater than the income gains for Panama itself. A link removal analysis reveals that most shipping links are associated with positive and quantitatively important positive international externalities.

DOI: 10.1162/rest.a.267
Pages: 1-45
Language: en
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