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Directional imbalance in transport prices and economic geography

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  • Takahashi, Takaaki
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    Abstract

    This paper examines how and why transport prices become imbalanced with respect to the direction of shipments and how this affects economic geography. It is shown that the equilibrium transport price of the shipment in a particular direction is a nondecreasing function of the relative size of the embarkation region. Furthermore, we show that the directional imbalance in transport prices increases the likelihood of the symmetric pattern being stable and decreases the likelihood of the core-periphery patterns being sustainable. In short, the imbalance acts as a dispersion force.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Urban Economics.

    Volume (Year): 69 (2011)
    Issue (Month): 1 (January)
    Pages: 92-102

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    Handle: RePEc:eee:juecon:v:69:y:2011:i:1:p:92-102

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    Web page: http://www.elsevier.com/locate/inca/622905

    Related research

    Keywords: Behavior of transport firms Break point Export price effect Import price effect Joint production Marginal cost of shipment Return constraint Substitution between imports and domestic products Sustain point;

    References

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    1. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
    2. OTTAVIANO, Gianmarco & TABUCHI , Takatoshi & THISSE, Jacques-François, . "Agglomeration and trade revisited," CORE Discussion Papers RP -1553, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Mori, Tomoya & Nishikimi, Koji, 2002. "Economies of transport density and industrial agglomeration," Regional Science and Urban Economics, Elsevier, vol. 32(2), pages 167-200, March.
    4. Wilmsmeier, Gordon & Hoffmann, Jan & Sanchez, Ricardo J., 2006. "The Impact of Port Characteristics on International Maritime Transport Costs," Research in Transportation Economics, Elsevier, vol. 16(1), pages 117-140, January.
    5. PICARD, Pierre M. & ZENG, Dao-Zhi, . "Agricultural sector and industrial agglomeration," CORE Discussion Papers RP -1893, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. Sjostrom William, 2004. "Ocean Shipping Cartels: A Survey," Review of Network Economics, De Gruyter, vol. 3(2), pages 1-28, June.
    7. David Hummels, 2007. "Transportation Costs and International Trade in the Second Era of Globalization," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 131-154, Summer.
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    9. Bougheas, Spiros & Demetriades, Panicos O. & Morgenroth, Edgar L. W., 1999. "Infrastructure, transport costs and trade," Journal of International Economics, Elsevier, vol. 47(1), pages 169-189, February.
    10. Behrens, Kristian & Carl Gaigne & Jacques-Francois Thisse, 2006. "Is the regulation of the transport sector always detrimental to consumers?," CIRJE F-Series CIRJE-F-455, CIRJE, Faculty of Economics, University of Tokyo.
    11. Se-il Mun & Shintaro Nakagawa, 2008. "Cross-border transport infrastructure and aid policies," The Annals of Regional Science, Springer, vol. 42(2), pages 465-486, June.
    12. Olaf Jonkeren & Erhan Demirel & Jos van Ommeren & Piet Rietveld, 2011. "Endogenous transport prices and trade imbalances," Journal of Economic Geography, Oxford University Press, vol. 11(3), pages 509-527, May.
    13. Takahashi, Takaaki, 2006. "Economic geography and endogenous determination of transport technology," Journal of Urban Economics, Elsevier, vol. 60(3), pages 498-518, November.
    14. Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2006. "How density economies in international transportation link the internal geography of trading partners," Journal of Urban Economics, Elsevier, vol. 60(2), pages 248-263, September.
    15. repec:ebl:ecbull:v:18:y:2006:i:5:p:1-7 is not listed on IDEAS
    16. Bruce A. Blonigen & Wesley W. Wilson, 2008. "Port Efficiency and Trade Flows," Review of International Economics, Wiley Blackwell, vol. 16(1), pages 21-36, 02.
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    Cited by:
    1. Gokan, Toshitaka, 2013. "The location of manufacturing firms and imperfect information in transport market," IDE Discussion Papers 398, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    2. Tanaka, Kiyoyasu & Tsubota, Kenmei, 2014. "Directional imbalance of freight rates : evidence from Japanese inter-prefectural data," IDE Discussion Papers 441, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    3. TAKATSUKA Hajime & Dao-Zhi ZENG & Laixun ZHAO, 2013. "Resource-based Regions, the Dutch Disease and City Development," Discussion papers 13001, Research Institute of Economy, Trade and Industry (RIETI).

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