Working Paper

Diffusion of Containerization

Abstract: This paper uses a newly constructed, comprehensive dataset to investigate the diffusion of containerization. The data show that country adoption is exceptionally fast while firm usage increases more slowly. To guide my empirical investigation, I build a multi-country trade model with endogenous adoption of a new transportation technology that is consistent with these facts. I then test empirically the predictions of the model and find that: (1) usage of containerization increases with firms' fixed costs and the size and average income of the container network; and (2) adoption depends on expected future usage, adoption costs, and trade with the United States, the first and largest user of containerization.

Keywords: Globalization; transportation; trade; technology diffusion;

JEL Classification: F63; L91; N70; O33;

Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: Finance and Economics Discussion Series

Publication Date: 2014-10-03

Number: 2014-88

Pages: 64 pages