Working Papers in Economics,
University of Bergen, Department of Economics

Abstract: Recent research indicates that transportation costs are more important for foods than other products due to food´s perishability. This paper uses transaction-level data to analyze the effect of trade costs on trade growth of a highly perishable good, fresh farmed salmon. I investigate trade growth, as well as two distinct margins of trade, the number of exporting firms and the shipment frequency. I find that trade growth is influenced by traditional gravity variables, such as distance and GDP. Further, the paper explores how variables, such as internal transportation costs and the exporters’ choice of transportation mode, impact export of salmon. To estimate the two margins of trade, two different count data models are estimated. The results indicate that increased transportation costs have a remarkably large negative effect on trade growth of salmon export from Norway, but that this effect is also highly dependent on aggregation level.

Keywords: salmon aquaculture; transaction-level data; gravity; margins of trade; count data models

JEL-codes: F10; F14; Q22

21 pages, October 3, 2015

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