NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Indivisibilities in Distribution

Thomas J. Holmes, Ethan Singer

NBER Working Paper No. 24525
Issued in April 2018
NBER Program(s):Industrial Organization Program, International Trade and Investment Program, Productivity, Innovation, and Entrepreneurship Program

This paper develops and estimates a model of indivisibilities in shipping and economies of scale in consolidation. It uses highly detailed data on imports for which it is possible to observe the contents of individual containers. In the model, a firm is able to adapt to indivisibility constraints by using consolidation strategies, and by determining how dense to make its distribution network in both space and time. Indivisibilities are found to create significant scale economies in distribution.

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Document Object Identifier (DOI): 10.3386/w24525

 
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