Endogenous Transport Prices and Trade Imbalances
AbstractAccording to economic theory, imbalances in trade flows affect transport prices because (some) carriers have to return without cargo from the low demand region to the high demand region. Therefore, transport prices in the high demand direction have to exceed those in the low demand direction. This implies that transport costs, and therefore trade costs, are fundamentally endogenous with respect to trade imbalances. We study this effect using transport prices for the inland waterway transport market in north-west Europe. We find that imbalances in trade flows have substantial effects on transport prices. We estimate that a one standard deviation increase in the trade imbalance from region A to region B decreases transport prices from A to B by about 8 percent.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-088/3.
Date of creation: 17 Sep 2008
Date of revision:
Contact details of provider:
Web page: http://www.tinbergen.nl
Imbalances in trade flows; trade costs; inland waterway transport market;
Other versions of this item:
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-14 (All new papers)
- NEP-GEO-2008-12-14 (Economic Geography)
- NEP-INT-2008-12-14 (International Trade)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rice, Patricia & Venables, Anthony J. & Patacchini, Eleonora, 2006.
"Spatial determinants of productivity: Analysis for the regions of Great Britain,"
Regional Science and Urban Economics,
Elsevier, vol. 36(6), pages 727-752, November.
- Patricia Rice & Tony Venables, 2004. "Spatial determinants of productivity: analysis for the regions of Great Britain," LSE Research Online Documents on Economics 2040, London School of Economics and Political Science, LSE Library.
- Patricia Rice & Anthony J. Venables, 2004. "Spatial Determinants of Productivity: Analysis for the Regions of Great Britain," CEP Discussion Papers dp0642, Centre for Economic Performance, LSE.
- Rice, Patricia & Venables, Anthony J., 2004. "Spatial Determinants of Productivity: Analysis for the Regions of Great Britain," CEPR Discussion Papers 4527, C.E.P.R. Discussion Papers.
- 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.
- J.Peter Neary, 2001.
"Of Hype and Hyperbolas: Introducing the New Economic Geography,"
Journal of Economic Literature,
American Economic Association, vol. 39(2), pages 536-561, June.
- J. Peter Neary, 2000. "Of Hype and Hyperbolas - Introducing the new Economic Geography," Working Papers 200019, School Of Economics, University College Dublin.
- James E. Anderson & Eric van Wincoop, 2004.
NBER Working Papers
10480, National Bureau of Economic Research, Inc.
- Clark, Ximena & Dollar, David & Micco, Alejandro, 2004.
"Port efficiency, maritime transport costs, and bilateral trade,"
Journal of Development Economics,
Elsevier, vol. 75(2), pages 417-450, December.
- Ximena Clark & David Dollar & Alejandro Micco, 2004. "Port Efficiency, Maritime Transport Costs and Bilateral Trade," NBER Working Papers 10353, National Bureau of Economic Research, Inc.
- James E. Anderson, 2005.
"Economic Integration and the Civilizing Commerce Hypothesis,"
Boston College Working Papers in Economics
673, Boston College Department of Economics.
- James E. Anderson, 2008. "Economic Integration and the Civilising Commerce Hypothesis," The World Economy, Wiley Blackwell, vol. 31(1), pages 141-157, 01.
- Krugman, Paul, 1998. "What's New about the New Economic Geography?," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 7-17, Summer.
- BEHRENS, Kristian & GAIGNE, Carl & OTTAVIANO, Gianmarco I.P. & THISSE, Jacques-François, .
"How density economies in international transportation link the internal geography of trading partners,"
CORE Discussion Papers RP
-1870, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- 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.
- Gilles Duranton & Michael Storper, 2008.
"Rising trade costs? Agglomeration and trade with endogenous transaction costs,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 41(1), pages 292-319, February.
- Duranton, Gilles & Storper, Michael, 2005. "Rising Trade Costs? Agglomeration and Trade with Endogenous Transaction Costs," CEPR Discussion Papers 4933, C.E.P.R. Discussion Papers.
- Gilles Duranton & Michael Storper, 2005. "Rising Trade Costs? Agglomeration and Trade with Endogenous Transaction Costs," CEP Discussion Papers dp0683, Centre for Economic Performance, LSE.
- Krugman, Paul, 1991.
"Increasing Returns and Economic Geography,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 483-99, June.
- Ricardo J S�nchez & Jan Hoffmann & Alejandro Micco & Georgina V Pizzolitto & Mart�n Sgut & Gordon Wilmsmeier, 2003. "Port Efficiency and International Trade: Port Efficiency as a Determinant of Maritime Transport Costs," Maritime Economics and Logistics, Palgrave Macmillan, vol. 5(2), pages 199-218, June.
- 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.
- Gianmarco I. P. Ottaviano & Diego Puga, 1998.
"Agglomeration in the Global Economy: A Survey of the 'New Economic Geography',"
The World Economy,
Wiley Blackwell, vol. 21(6), pages 707-731, 08.
- Ottaviano, Gianmarco Ireo Paolo & Puga, Diego, 1997. "Agglomeration in the Global Economy: A Survey of the 'New Economic Geography'," CEPR Discussion Papers 1699, C.E.P.R. Discussion Papers.
- Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
- Hojman, Daniel A. & Szeidl, Adam, 2008. "Core and periphery in networks," Journal of Economic Theory, Elsevier, vol. 139(1), pages 295-309, March.
- V. Filipe MARTINS-DA-ROCHA & YIANNIS VAILAKIS, 2008.
"Endogenous Transaction Costs,"
0810, Exeter University, Department of Economics.
- Martins-da-Rocha, Victor Filipe & Vailakis, Yiannis, 2008. "Endogenous Transaction Costs," Economics Working Papers (Ensaios Economicos da EPGE) 680, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- Inmaculada Martínez-Zarzoso & Sami Bensassi, 2011.
"The price of modern maritime piracy,"
Ibero America Institute for Econ. Research (IAI) Discussion Papers
213, Ibero-America Institute for Economic Research.
- Joern Kleinert & Julia Spies, 2011. "Endogenous Transport Costs in International Trade," IAW Discussion Papers 74, Institut für Angewandte Wirtschaftsforschung (IAW).
- Erhan Demirel & Jos van Ommeren & Piet Rietveld, 2007.
"A Matching Model for the Backhaul Problem,"
Tinbergen Institute Discussion Papers
07-083/3, Tinbergen Institute, revised 19 Dec 2007.
- Takahashi, Takaaki, 2011. "Directional imbalance in transport prices and economic geography," Journal of Urban Economics, Elsevier, vol. 69(1), pages 92-102, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antoine Maartens (+31 626 - 160 892)).
If references are entirely missing, you can add them using this form.