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The effects of highway investments on production costs in the Korean manufacturing sector

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  • Sun-Kwan Lee
  • Euijune Kim

Abstract

The purpose of this paper is to analyse the impact of highway projects on production costs using the demands of production factors and production cost functions for Korean cities. The major contributions that are distinguishable from previous works are to integrate the cost function with the transportation demand model for the impact analysis of the highway project and to estimate the cost savings of manufacturing production with the reduction of the travel time. This approach goes on to identify how the development of highways could decrease the production costs of the manufacturing sectors across regions. The model is applied to two highway routes, the SN and EW projects. Although the investment expenditures of the SN highway are expected to be much higher than those of the EW, this project can improve not only the accessibilities of manufacturing-oriented cities, but also the urbanization effects by the population agglomeration in the Seoul Metropolitan Area. The approach in this paper is expected to contribute to setting up the economic priorities of highway projects.

Suggested Citation

  • Sun-Kwan Lee & Euijune Kim, 2015. "The effects of highway investments on production costs in the Korean manufacturing sector," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 19(2), pages 182-191, July.
    • Handle: RePEc:taf:rjusxx:v:19:y:2015:i:2:p:182-191
    DOI: 10.1080/12265934.2014.980301
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