Distance-sensitivity of German imports: First evidence from firm-product level data

This paper uses a tailor-made new data set of 3,376,598 observations for German imports at the firm-product-country of origin level to estimate a gravity equation and to investigate the link between the amount of firms' imports and the distance to countries of origin. It is shown that, in line with stylized facts based on aggregate data, the quantity of imports declines significantly with distance within a firm for a given product.