We determine how time delays affect international trade, using newly-collected World Bank data on the days it takes to move standard cargo from the factory gate to the ship in 126 countries.
We estimate a modified gravity equation, controlling for endogeneity and remoteness. On average, each additional day that a product is delayed prior to being shipped reduces trade by at least 1 percent. Put differently, each day is equivalent to a country distancing itself from its trade partners by 85 km on average. Delays have an evengreater impact ondeveloping country exports and exports of time-sensitive goods, such as perishable agricultural products. In particular , a day’s delayreduces a country’s relative exports of time-sensitive to time-insensitive agricultural goods by 7 percent.