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Over Land and Over Sea: Domestic Trade Frictions in the Philippines

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  • Go, Eugenia

    (Asian Development Bank)

Abstract

We create two novel datasets—the starting dates of Roll-On Roll-Off Terminal System (RRTS) service by route, and interprovincial land trade—to evaluate the effects of the RRTS on agricultural trade costs within the Philippines as measured by border effects. We find province border effects to be substantial in the Philippines, with a typical province trading 28–53 times more with itself than with other provinces. The RRTS reduced this by a factor of 0.65. This is confirmed by increased trade flows, with RRTS province pairs trading 36%–42% more on average compared to similar unconnected province pairs. However, the border effect reduction is unevenly distributed and tends to be limited to provinces near the biggest demand center.

Suggested Citation

  • Go, Eugenia, 2020. "Over Land and Over Sea: Domestic Trade Frictions in the Philippines," ADB Economics Working Paper Series 611, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0611
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    border effects; domestic trade; trade costs;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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