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Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders

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  • Li, Zhigang
  • Yu, Xiaohua
  • Zeng, Yinchu
  • Holst, Rainer

Abstract

Using a unique survey data on agricultural traders in China in 2004, this study provides direct evidence on the significance of inter-regional trade barriers and their key components. Our major findings are as follows. (1) The trade barriers within China are fairly small, accounting for about 20% of trade value. (2) Transport and non-transport costs respectively contribute 42% and 58% to the trade barriers. (3) Labor and transport-related taxes are the two largest proportions of total transport costs, and respectively account for 35% and 30%. (4) Artificial trade barriers created by the government are not sizable as we perceived. (5) Road quality is crucial for reducing transport costs within China: increasing transport speed by 1km per hour, the total transport costs for Chinese agricultural traders would decrease by 0.6%, mainly due to improved fuel-burning efficiency and reduced labor requirement.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 23 (2012)
Issue (Month): 4 ()
Pages: 1003-1010

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Handle: RePEc:eee:chieco:v:23:y:2012:i:4:p:1003-1010

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Web page: http://www.elsevier.com/locate/chieco

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Keywords: Transport costs; China; Agricultural traders; Infrastructure;

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References

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Citations

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Cited by:
  1. Li, Han & Li, Zhigang, 2013. "Road investments and inventory reduction: Firm level evidence from China," Journal of Urban Economics, Elsevier, vol. 76(C), pages 43-52.
  2. Li, Zhigang & Chen, Yu, 2013. "Estimating the social return to transport infrastructure: A price-difference approach applied to a quasi-experiment," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 669-683.

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