An analytical framework for causal decision-making in international trade
In international trade, selecting an Incoterm is a critical decision impacting costs and risks. Previous quantitative studies relied on traditional econometric models imposing strict linearity, limiting causal interpretation. This study addresses this gap by applying a causal inference framework to identify Incoterm choice drivers among Colombian exporters. The methodology combines (i) directed acyclic graphs to encode causal assumptions; (ii) nested, cross-validated random forests to capture complex, nonlinear relationships; and (iii) G-computation to estimate unbiased causal effects. Results show that transactional features dominate selection. Transitioning from bulk to containerized cargo increases the probability of selecting an E/F-group term-such as Ex Works (EXW), Free On Board (FOB), or Free Carrier (FCA), where the seller’s obligations end upon delivery to the buyer-by 13.4 percentage points. Additionally, shipment weight and value exhibit nonlinear threshold effects, where E/F terms become significantly more probable only after shipments surpass specific size thresholds-a pattern missed by prior linear models. Relational factors also matter; sharing a common language with the trade partner increases E/F-term probability by 6.5 percentage points. This framework provides managers with a tool to predict Incoterm choices and quantify the causal impact of altering shipment profiles, enabling better-aligned, lower-risk trade contracts. • Apply a causal framework to model trade term selection in real-world customs data. • Capture nonlinear effects of shipment size and value using advanced learning models. • Identify primary trade drivers through empirical analysis of firm-level transactions. • Estimate causal impacts of logistics choices with robust decision tools. • Support international trade planning with data-informed strategic insights.
Authors
- Diego Alejandro López-Cadavid (ORCID: https://orcid.org/0000-0003-2221-2381)
- Juan Gabriel Vanegas-López
- Carlos Andrés Pérez-Aguirre
Institutions
- University of Caldas (CO)
- Universidad Nacional de Colombia (CO)
- Antioquia Institute of Technology (CO)
Publication Details
- Journal
- Decision Analytics Journal
- Published
- 2026-02-04
- DOI
- https://doi.org/10.1016/j.dajour.2026.100686
- Primary Topic
- Global trade and economics
- Type
- article
- Field-Weighted Citation Impact
- 0.00