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Spatial Scope Of A Modern Transport Technology

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  • Armando J. Garcia Pires
  • José Pedro Pontes

Abstract

type="main"> This paper studies the endogenous choice of transport technology, “traditional” versus “modern,” by a shipper. Although the “modern” technology is characterized by higher fixed costs and a higher speed of transport, it is chosen for intermediate distances, rather than to long distances. The reason is that, when the shipper switches to the “modern” technology, the industrial firm changes production from the home to the foreign city. Thus, the demand for transport decreases proportionally to the distance between the home and foreign city. For long distances, revenue from transportation becomes so low that the “modern” technology does not break even.

Suggested Citation

  • Armando J. Garcia Pires & José Pedro Pontes, 2013. "Spatial Scope Of A Modern Transport Technology," Journal of Regional Science, Wiley Blackwell, vol. 53(4), pages 712-723, October.
    • Handle: RePEc:bla:jregsc:v:53:y:2013:i:4:p:712-723
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    Cited by:

    1. Steven Brakman & Charles Marrewijk & Mark Partridge, 2015. "Local Consequences Of Global Production Processes," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 1-9, January.

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