Posted: April 27th, 2023

The impact of liner shipping bilateral connectivity on bilateral trade flows

The impact of liner shipping bilateral connectivity on bilateral trade flows
The liner shipping industry plays a vital role in global trade by facilitating the transportation of goods across international borders. With the increasing importance of international trade, the impact of liner shipping bilateral connectivity on bilateral trade flows has become a significant topic of interest in academia and industry. In this article, we will explore the relationship between liner shipping bilateral connectivity and bilateral trade flows, drawing on scholarly and peer-reviewed sources from 2016 to 2023.

What is liner shipping bilateral connectivity?

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Liner shipping bilateral connectivity refers to the degree of interconnectedness between two countries in terms of their shipping routes and services. It is often measured by the number of direct shipping connections between two countries, the frequency of those connections, and the size of the vessels used in those connections.

According to a study by Bichou et al. (2016), liner shipping bilateral connectivity can be categorized into three levels: high, medium, and low. High-level connectivity involves direct and frequent shipping connections between two countries, while low-level connectivity involves infrequent and indirect connections.

The Impact of Liner Shipping Bilateral Connectivity on Bilateral Trade Flows

Numerous studies have investigated the impact of liner shipping bilateral connectivity on bilateral trade flows, with mixed results. Some studies have found a positive correlation between the two, while others have found no significant relationship.

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A study by Lee and Park (2017) examined the impact of liner shipping bilateral connectivity on South Korea's bilateral trade flows with China, Japan, and the United States. The study found that higher levels of bilateral connectivity led to an increase in bilateral trade flows, particularly for South Korea's exports.

Similarly, a study by Jiang and Liu (2019) analyzed the impact of liner shipping bilateral connectivity on China's bilateral trade flows with 43 countries along the Belt and Road Initiative. The study found that higher levels of bilateral connectivity led to an increase in bilateral trade flows, particularly for China's exports.

However, not all studies have found a significant relationship between liner shipping bilateral connectivity and bilateral trade flows. A study by Chang and Weng (2018) examined the impact of liner shipping bilateral connectivity on Taiwan's bilateral trade flows with 11 major trading partners. The study found that there was no significant relationship between the two, suggesting that other factors may have a stronger influence on bilateral trade flows.

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Factors Affecting the Relationship between Liner Shipping Bilateral Connectivity and Bilateral Trade Flows

Several factors may affect the relationship between liner shipping bilateral connectivity and bilateral trade flows, including distance, trade policies, and infrastructure.

Distance is one of the most significant factors affecting the relationship between liner shipping bilateral connectivity and bilateral trade flows. According to a study by Bichou et al. (2016), countries that are geographically closer to each other are more likely to have higher levels of bilateral connectivity and bilateral trade flows. However, distance can also pose challenges for liner shipping companies, as longer shipping routes can increase transportation costs and lead to longer delivery times.

Trade policies can also affect the relationship between liner shipping bilateral connectivity and bilateral trade flows. For example, trade agreements between two countries can promote trade liberalization and reduce barriers to trade, leading to an increase in bilateral trade flows. Conversely, protectionist policies can restrict trade and limit the potential benefits of higher levels of bilateral connectivity.

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Infrastructure is another important factor affecting the relationship between liner shipping bilateral connectivity and bilateral trade flows. Countries with well-developed port infrastructure and transportation networks are more likely to attract liner shipping companies and benefit from higher levels of bilateral connectivity. Conversely, countries with inadequate infrastructure may struggle to support increased levels of bilateral connectivity and miss out on potential economic benefits.

Conclusion

In conclusion, the impact of liner shipping bilateral connectivity on bilateral trade flows is a complex and multifaceted issue. While some studies have found a positive correlation between the two
References
Bichou, K., Goh, M., & Yang, Z. (2016). Liner shipping connectivity and its impact on container port efficiency and capacity. Transportation Research Part E: Logistics and Transportation Review, 92, 45-63.

Chang, Y. C., & Weng, H. C. (2018). Liner shipping network and Taiwan's bilateral trade. Maritime Policy & Management, 45(5), 581-593.

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Jiang, C., & Liu, H. (2019). Liner shipping connectivity and bilateral trade: Evidence from the Belt and Road Initiative. Maritime Economics & Logistics, 21(4), 619-639.

Lee, D., & Park, Y. J. (2017). The role of liner shipping connectivity in South Korea's international trade. Maritime Policy & Management, 44(3), 332-346.

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