Pacific Islands' Bilateral Trade: The Role of Remoteness and of Transport Costs

Bilateral trade of geographically distant countries is likely to be negatively affected by the distance separating them from their trading partners and positively affected by their remoteness, defined as the average weighted distance between two countries with weights reflecting the absorptive capacity of the partner country. In presence of competitive transport costs, the effect of remoteness and distance is diluted. An augmented gravity model applied to the Pacific islands' bilateral trade from 1980 to 2004 shows that a doubling of the elasticity of distance would decrease their average bilateral trade by 80 per cent. Remoteness positively affects the Pacific islands' bilateral trade, but does not compensate for the negative effect of distance. The opposite is found for the Caribbean islands, where the elasticity of trade with respect to remoteness is eight times bigger than that for the Pacific islands. ...bilateral trade, remoteness, transport costs, infrastructure, gravity model, Pacific islands

Reforms, Remoteness and Risk in Africa: Understanding Inequality and Poverty during the 1990s

reforms, remoteness, risk, poverty, Africa

The Economics of Isolation and Distance

This paper explores the economic implications of isolation and remoteness. Evidence on the impact of distance on trade costs and trade flows is reviewed, and the effects of remoteness on real incomes are investigated. Empirical work confirms the predictions of theory, that distance from markets and sources of supply can have a significant negative impact on per capita income. The possible implications of new technologies for these spatial inequalities are discussed.Economic isolation, market access, trade costs.

Wiener Index and Remoteness in Triangulations and Quadrangulations

Let $G$ be a a connected graph. The Wiener index of a connected graph is the sum of the distances between all unordered pairs of vertices. We provide asymptotic formulae for the maximum Wiener index of simple triangulations and quadrangulations with given connectivity, as the order increases, and make conjectures for the extremal triangulations and quadrangulations based on computational evidence. If $\overline{\sigma}(v)$ denotes the arithmetic mean of the distances from $v$ to all other vertices of $G$, then the remoteness of $G$ is defined as the largest value of $\overline{\sigma}(v)$ over all vertices $v$ of $G$. We give sharp upper bounds on the remoteness of simple triangulations and quadrangulations of given order and connectivity

Remoteness and Real Exchange Rate Volatility

This paper examines the impact of trade costs on real exchange rate volatility. The relationship is examined by constructing a two-country Ricardian model of trade, based on the work of Dornbusch, Fischer, and Samuelson (1977), which shows that higher trade costs result in a larger nontradables sector, in turn leading to higher real exchange rate volatility. We then construct a remoteness index to proxy for trade costs, and provide empirical evidence supporting the channel. Copyright 2006, International Monetary Fund

International financial remoteness and macroeconomic volatility

This paper shows that proximity to major international financial centers seems to reduce business cycle volatility. In particular, we show that countries that are further from major locations of international financial activity systematically experience more volatile growth rates in both output and consumption, even after accounting for domestic financial depth, political institutions, and other controls. Our results are relatively robust in the sense that more financially remote countries are more volatile, though the results are not always statistically significant. The comparative strength of this finding is in contrast to the more ambiguous evidence found in the literature.Business cycles

Financial Remoteness and the Net External Position

This paper shows that, controlling for standard determinants of net external positions, financially-remote countries exhibit more positive net external positions. This finding is found to be stronger for less advanced countries, hinting at external funding problems for more remote countries. Being located near financially very open countries, being in currency unions with creditor countries, or being highly integrated through financial and trade linkages with a ‘core’ country facilitates net external borrowing. Consequently, evidence is found for an important role of geographic and bilateral factors for a country’s net external wealth.net foreign assets, cross-border investment, distance, proximity

Financial remoteness and the net external position

This paper shows that, controlling for standard determinants of net external positions, financially-remote countries exhibit more positive net external positions. This finding is found to be stronger for less advanced countries, hinting at external funding problems for more remote countries. Being located near financially very open countries, being in currency unions with creditor countries, or being highly integrated through financial and trade linkages with a ‘core’ country facilitates net external borrowing. Consequently, evidence is found for an important role of geographic and bilateral factors for a country’s net external wealth. JEL Classification: F21, F34, F41Cross-Border Investment, distance, net foreign assets, proximity