Paving the road to export: the trade impacts of domestic transport costs and road quality
AbstractThe literature examining the effects of domestic transport costs on trade flows is scarce. The few studies available rely mostly on distance-based measures as proxies of transport costs which impede analyzing the trade impacts of transport-infrastructure improvements, a critical aspect in regional and public policy. Applying a novel methodology that combines real freight costs and Geographic Information System (GIS) analysis to the case of Colombia, this paper measures the extent to which domestic transport costs -from the place of production to the port of shipment- act as a friction to international trade. Domestic transport costs are found to significantly affect the prospects of exporting. For instance, regions within the country with transport costs in the 25th percentile export around 2.3 times more than regions with transport costs in the 75th percentile, once other factors are controlled for. Export increases from road improvements are found to be larger in regions with initially higher transport costs. This is because regions with initially higher transport costs are normally associated with longer routes and those tend to have larger shares of roads in poor conditions
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24625.
Date of creation: 25 Aug 2010
Date of revision:
Transport costs; road quality; regional exports;
Find related papers by JEL classification:
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
- F10 - International Economics - - Trade - - - General
- O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-11 (All new papers)
- NEP-GEO-2010-09-11 (Economic Geography)
- NEP-INT-2010-09-11 (International Trade)
- NEP-URE-2010-09-11 (Urban & Real Estate Economics)
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