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The world is not yet flat: Transport costs matter!

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  • Behrens, Kristian
  • Bougna, Théophile
  • Brown, W. Mark

Abstract

We provide evidence for the effects of changes in transport costs, international trade exposure, and input-output linkages on the geographical concentration of Canadian manufacturing industries. Increasing transport costs, stronger import competition, and the spreading out of upstream suppliers and downstream customers are all strongly associated with declining geographical concentration of industries. The effects are large: changes in trucking rates, in import exposure, and in access to intermediate inputs explain between 20% and 60% of the observed decline in spatial concentration over the 1992?2008 period.

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  • Behrens, Kristian & Bougna, Théophile & Brown, W. Mark, 2015. "The world is not yet flat: Transport costs matter!," CEPR Discussion Papers 10356, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10356
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    Cited by:

    1. Branco, Catarina & Dohse, Dirk & dos Santos, João Pereira & Tavares, José, 2022. "Nobody's gonna slow me down? The effects of a transportation cost shock on firm performance and behavior," Ruhr Economic Papers 949, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Tomoya Mori, 2017. "Agglomeration," KIER Working Papers 960, Kyoto University, Institute of Economic Research.
    3. Arsène Aurelien NJAMEN KENGDO & Luc NEMBOT NDEFFO & Désiré AVOM, 2020. "The Effect of Foreign Debt on Economic Growth in Sub-Saharan African Sub-Regions," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 109-114.
    4. Alam, Muneeza & Herrera Dappe, Matías & Melecky, Martin & Goldblatt, Ran, 2022. "Wider economic benefits of transport corridors: Evidence from international development organizations," Journal of Development Economics, Elsevier, vol. 158(C).
    5. Ekaterina Aleksandrova & Kristian Behrens & Maria Kuznetsova, 2020. "Manufacturing (co)agglomeration in a transition country: Evidence from Russia," Journal of Regional Science, Wiley Blackwell, vol. 60(1), pages 88-128, January.
    6. Kristian Behrens, 2016. "Agglomeration and clusters: Tools and insights from coagglomeration patterns," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(4), pages 1293-1339, November.
    7. Branco, Catarina & Dohse, Dirk C. & Pereira dos Santos, João & Tavares, José, 2023. "Nobody’s gonna slow me down? The effects of a transportation cost shock on firm performance and behavior," Open Access Publications from Kiel Institute for the World Economy 273314, Kiel Institute for the World Economy (IfW Kiel).
    8. Arsène Aurelien Njamen Kengdo & Tii N. Nchofoung & Philemon Bonaventure Ntang, 2020. "Effect of external debt on the level of infrastructure in Africa," Economics Bulletin, AccessEcon, vol. 40(4), pages 3349-3366.
    9. Behrens, Kristian & Sharunova, Vera, 2015. "Inter- and intra-firm linkages: Evidence from microgeographic location patterns," CEPR Discussion Papers 10921, C.E.P.R. Discussion Papers.
    10. Edilberto Tiago de Almeida & Raul da Mota Silveira Neto & Roberta de Moraes Rocha, 2022. "Manufacturing location patterns in Brazil," Papers in Regional Science, Wiley Blackwell, vol. 101(4), pages 839-873, August.
    11. Cosar,Ahmet Kerem, 2022. "Overland Transport Costs : A Review," Policy Research Working Paper Series 10156, The World Bank.
    12. Lenaerts, Bert & Allroggen, Florian & Malina, Robert, 2021. "The economic impact of aviation: A review on the role of market access," Journal of Air Transport Management, Elsevier, vol. 91(C).
    13. Behrens, Kristian & Guillain, Rachel, 2017. "The determinants of coagglomeration: Evidence from functional employment patterns," CEPR Discussion Papers 11884, C.E.P.R. Discussion Papers.
    14. Robby K. Bemrose & W. Mark Brown & Jesse Tweedle, 2020. "Going the distance: Estimating the effect of provincial borders on trade when geography (and everything else) matters," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 1098-1131, August.
    15. Armando J. Garcia Pires & José Pedro Pontes, 2021. "(De)Industrialization, Technology and Transportation," Open Economies Review, Springer, vol. 32(3), pages 527-538, July.
    16. Kristian Behrens & Brahim Boualam & Julien Martin, 2016. "The resilience of the Canadian textile industries and clusters to shocks, 2001-2013," CIRANO Project Reports 2016rp-05, CIRANO.

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    More about this item

    Keywords

    Geographical concentration; Transport costs; International trade exposure; Input-output linkages; Trucking rates;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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