The authors argue that endogeneity of transportation costs needs to be taken into account when estimating the effect of distance on trade. Otherwise, the estimates of the distance effect may be biased and inconsistent. Endogenous transportation can introduce slope heterogeneity and spatial...

Cocaine trafficking has a significant but understudied influence on Central American economies. The economic implications of this trade have repercussions for both regional development and drug control policy debates, and therefore deserve greater attention. Towards that end, in this paper we...