The Organization of International Trade

Frank Stähler


This paper discusses how international trade is organized from export to trans-boundary transport to import. All evidence suggests that the transport sector is independent, exercises market power and may feature strong economies of scale. Using a large dataset of maritime transport costs, tariffs and export prices, we show that a decline in tariffs leads to a reduction in transport costs. Furthermore, we show that an increase tariffs does not leads to a decrease in export prices. Our results are consistent only with international trade being organized in vertical partnerships.