IAME 2015 Conference Kuala Lumpur, Malaysia Paper ID 187 Marco Fugazza, Jan Hoffmann 1 Liner Shipping Connectivity as determinant of the geography of trade Abstract Transport connectivity is a crucial determinant of bilateral exports. This paper presents an empirical assessment of the relationship between bilateral maritime liner shipping connectivity and exports in containerizable goods during the period 2006-2013. Making use of probed “gravity” type trade models, the paper incorporates new data on different measurements of maritime distance, as well as a unique new dataset and new bilateral connectivity indices developed by UNCTAD. The empirical investigations unequivocally show that lacking a direct maritime connection with a trade partner is associated with lower values of exports; any additional transshipment is associated with a 40 percent lower value of bilateral exports. Other indicators of liner shipping connectivity incorporated in the research take into consideration levels of competition and container vessel sizes. Results also indicate that the quality of bilateral connectivity as measured by several composite indices is a crucial determinant of bilateral exports. All empirical results suggest that in the absence of a bilateral connectivity indicator the impact of distance on bilateral exports in classical gravity models is likely to be overestimated. Keywords: Liner shipping bilateral connectivity, exports of containerizable goods, container shipping networks, gravity models 1. Introduction Maritime transport is at the core of international trade in merchandises. Around 80% of volume of goods exchanged in the world are transported via sea (UNCTAD, 2008). The percentage share is even higher for most developing countries and in terms of total transport services measures in ton-kms. The predominance of maritime transport has increased in particular for manufactured goods due to the intensification of containerized transport services. Thanks to containerization and the global liner shipping network, small and large exporters and importers of finished and 1 United Nations Conference on Trade and Development, UNCTAD, Geneva. Marco.Fugazza@UNCTAD.org, Jan.Hoffmann@UNCTAD.org