The Influence of Distance on French International Trade (1850 to 1913): A Comparison with Germany

ABSTRACT

This article tests the influence of distance on French international trade during the first globalization by using Germany as a mirror. Unlike Germany, the impact of distance on French exports to distant markets contradicts the literature in a context of fall in transaction costs. France did not take advantage of the globalization that was occurring at the end of the period insofar as it did not intensify its exports to emerging countries that were enjoying rapid economic growth. To understand the difficulties encountered by France in exporting, we discuss the role of commercial policy and of price competitiveness.

KEYWORDS:

• Distance
• first globalization
• gravity model
• international trade
• trade policy

JEL CLASSIFICATION:

• F10
• N73

Acknowledgment

The authors thank Robert Pahre and Béatrice Dedinger, who offered the original data set. The authors also thank Karine Onfroy for helpful assistance and A. Broder, G. Daudin, J.-P. Dormois, B. Herz, J.-O. Hesse, S. Maveyraud, Ch. Meissner, K. Oosterlink, N. Wolf, and referees for comments and suggestions.

Notes

¹ The RICardo database includes bilateral flows for more than 200 geographical areas between 1787 and 1938. This database was computed by Béatrice Dedinger (Sciences Po Paris, Department of History).

² It should be noted that, according to the RICardo data set, the bilateral trade balance between France and Germany is in equilibrium during the period (see www.ricardo.medialab.sciences-po.fr).

³ We apply the classic (unweighted) average annual growth rate formula (or compound annual growth rate). Using this method, several differences may appear between our results and those of Maddison, even if, broadly speaking, both methods give similar results. Faced with missing values for GDP per capita, the number of countries included may differ according to the subperiod. In order to have at least one observation for the African zone, we decided to highlight the subperiod of 1870 to 1913.

⁴ The Lafay index (LFI) is a standard specialization index. For any given product i, its expression is

where and are export and import values of product i and N is the number of products. Thus, a positive value indicates the existence of a comparative advantage in a given item (a specialization in the ith good). On the contrary, negative values point to a comparative disadvantage.

Additional information

Funding

The authors thank Région Nouvelle Aquitaine for financial support.