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[post_content] => Dear All,
The Department of Economics invites you to their weekly seminar on Wednesday, April 16th, 2025.
Time: 1:40 PM to 2:50 PM
Venue: AC 04 301
Speaker: Prof. Tom Raster
Title: Breaking the ice: The persistent effects of pioneers on trade relationships
Abstract :
This paper provides the first causal evidence of the effect of individual pioneers — first movers on trade links — on aggregate trade. I collect detailed data on all 1.4 million voyages between Baltic Sea ports and the rest of the world from 1500 until the 1850s, including 47,000 pioneering voyages that first connected two towns. I study the effect of pioneering on subsequent trade in a gravity model of yearly port-pair trade and instrument pioneering at the granular voyage level with (i) quasi-random en-route encounters with captains from new ports, and (ii) rerouting due to the unpredictable obstruction of previous destinations by sea ice. I find that 10% of total trade value is due to recent pioneering. A single pioneering voyage increases town exports by 25–33% for the 12% links that persist. Survival is higher for pioneered ports that are more distant from the origin port or existing trade partners in terms of kilometers, product mix, religion, or language. However, pioneers tend to select less distant ports. Therefore, returns are greatest when sea ice removes this selection and forces pioneers to experiment with exogenously determined ports. Pioneering spills over onto other traders, reducing the private returns of pioneers. This raises concerns about insufficient ex-ante pioneering and underlines the importance of policies that foster pioneering, particularly with distant destinations.
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[post_content] => Dear All,
The Department of Economics invites you to their weekly seminar on Wednesday, April 16th, 2025.
Time: 1:40 PM to 2:50 PM
Venue: AC 04 301
Speaker: Prof. Tom Raster
Title: Breaking the ice: The persistent effects of pioneers on trade relationships
Abstract :
This paper provides the first causal evidence of the effect of individual pioneers — first movers on trade links — on aggregate trade. I collect detailed data on all 1.4 million voyages between Baltic Sea ports and the rest of the world from 1500 until the 1850s, including 47,000 pioneering voyages that first connected two towns. I study the effect of pioneering on subsequent trade in a gravity model of yearly port-pair trade and instrument pioneering at the granular voyage level with (i) quasi-random en-route encounters with captains from new ports, and (ii) rerouting due to the unpredictable obstruction of previous destinations by sea ice. I find that 10% of total trade value is due to recent pioneering. A single pioneering voyage increases town exports by 25–33% for the 12% links that persist. Survival is higher for pioneered ports that are more distant from the origin port or existing trade partners in terms of kilometers, product mix, religion, or language. However, pioneers tend to select less distant ports. Therefore, returns are greatest when sea ice removes this selection and forces pioneers to experiment with exogenously determined ports. Pioneering spills over onto other traders, reducing the private returns of pioneers. This raises concerns about insufficient ex-ante pioneering and underlines the importance of policies that foster pioneering, particularly with distant destinations.
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