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Transport Costs and Trade Volumes: Evidence from the Trans-Atlantic Iron Trade, 1870–1913

Published online by Cambridge University Press:  13 March 2015

Kris Inwood  and
Ian Keay
Kris Inwood
Affiliation:
Professor, Department of Economics and Department of History, University of Guelph, 50 Stone Road, Guelph, ON, N1G 2W1, Canada. E-mail: [email protected].
Ian Keay
Affiliation:
Associate Professor, Department of Economics, Queen's University, 94 University Avenue, Kingston, ON, K7L 3N6, Canada. E-mail: [email protected].
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Abstract

We use newly compiled evidence on inter- and intra-continental shipping costs to investigate the relationship between transportation and trade for trans-Atlantic iron markets from 1870–1913. Although we find a surprisingly weak connection linking ocean freight rates to British exports, after controlling for endogeneity and measuring all costs associated with inter-continental pig iron shipments and the intra-continental assembly of raw materials, the importance of transportation strongly asserts itself. The cost to transport pig iron across the Atlantic, and the cost to transport iron ore and coking coal within North America, were important determinants of the volume of British exports.

Type
Articles
Information
The Journal of Economic History , Volume 75 , Issue 1 , March 2015 , pp. 95 - 124
Copyright
Copyright © The Economic History Association 2015 

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Footnotes

The authors would like to thank Ann Carlos, Tim Guinnane, Noam Yuchtman, and participants at the Yale Economic History Workshop, 2012 Canadian Economics Association Annual Meeting, 2012 Rimini Conference, and 2012 Economic History Association Annual Meeting for helpful comments. Thanks to Paul Rhode and two anonymous referees for improving this article. Robert C. Allen and David Jacks generously provided data and documentation. All errors and omissions remain the responsibility of the authors.

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