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Roads and Trade: Evidence from the U.S

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  • Gilles Duranton
  • Peter Morrow
  • Matthew Turner

Abstract

We estimate the effect of interstate highways on the level and composition of trade for us cities. Highways within cities have a large effect on the weight of city exports with an elasticity of approximately 0.5. We find little effect of highways on the total value of exports. Consistent with this, we find that cities with more highways specialize in sectors producing heavy goods.

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Bibliographic Info

Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-479.

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Length: Unknown pages
Date of creation: 08 Mar 2013
Date of revision:
Handle: RePEc:tor:tecipa:tecipa-479

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Keywords: interstate highways; transportation costs; trade and specializartion;

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References

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  1. Clark, Ximena & Dollar, David & Micco, Alejandro, 2004. "Port efficiency, maritime transport costs, and bilateral trade," Journal of Development Economics, Elsevier, Elsevier, vol. 75(2), pages 417-450, December.
  2. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, Elsevier, vol. 62(1), pages 53-82, January.
  3. Gilles Duranton & Matthew A. Turner, 2009. "The Fundamental Law of Road Congestion: Evidence from US Cities," SERC Discussion Papers, Spatial Economics Research Centre, LSE 0030, Spatial Economics Research Centre, LSE.
  4. Guy Michaels, 2007. "The effect of trade on the demand for skill - evidence from the interstate highway system," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 3268, London School of Economics and Political Science, LSE Library.
  5. Gilles Duranton & Matthew A. Turner, 2007. "Urban growth and transportation," Working Papers, University of Toronto, Department of Economics tecipa-305, University of Toronto, Department of Economics.
  6. Costas Arkolakis & Arnaud Costinot & Andrés Rodríguez-Clare, 2009. "New Trade Models, Same Old Gains?," NBER Working Papers 15628, National Bureau of Economic Research, Inc.
  7. Paul Beaudry & David A. Green & Benjamin M. Sand, 2013. "Spatial Equilibrium with Unemployment and Wage Bargaining: Theory and Estimation," NBER Working Papers 19118, National Bureau of Economic Research, Inc.
  8. Pierre-Philippe Combes & Miren Lafourcade, 2005. "Transport costs: measures, determinants, and regional policy implications for France," Journal of Economic Geography, Oxford University Press, Oxford University Press, vol. 5(3), pages 319-349, June.
  9. Edward L. Glaeser & Janet E. Kohlhase, 2003. "Cities, Regions and the Decline of Transport Costs," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 2014, Harvard - Institute of Economic Research.
  10. John Fernald, 1997. "Roads to prosperity? assessing the link between public capital and productivity," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 592, Board of Governors of the Federal Reserve System (U.S.).
  11. BEHRENS, Kristian & PICARD, Pierre M., 2008. "Transportation, freight rates, and economic geography," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2008040, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," NBER Working Papers 14806, National Bureau of Economic Research, Inc.
  13. Djankov, Simeon & Freund, Caroline & Pham, Cong S., 2006. "Trading on time," Policy Research Working Paper Series 3909, The World Bank.
  14. David Hummels, 2007. "Transportation Costs and International Trade in the Second Era of Globalization," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 21(3), pages 131-154, Summer.
  15. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, Econometric Society, vol. 70(5), pages 1741-1779, September.
  16. Carolyn L. Evans & James Harrigan, 2005. "Distance, Time, and Specialization: Lean Retailing in General Equilibrium," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 292-313, March.
  17. Harrigan, James, 2010. "Airplanes and comparative advantage," Journal of International Economics, Elsevier, Elsevier, vol. 82(2), pages 181-194, November.
  18. Anne-Celia Disdier & Keith Head, 2008. "The puzzling persistence of the distance effect on bilateral trade," Working Papers 21709, Institut National de la Recherche Agronomique, France.
  19. Tony Venables & Alberto Behar, 2010. "Transport Costs and International Trade," Economics Series Working Papers 488, University of Oxford, Department of Economics.
  20. Gilles Duranton, 2007. "Urban Evolutions: The Fast, the Slow, and the Still," American Economic Review, American Economic Association, American Economic Association, vol. 97(1), pages 197-221, March.
  21. Simon, Curtis J., 2004. "Industrial reallocation across US cities, 1977-1997," Journal of Urban Economics, Elsevier, vol. 56(1), pages 119-143, July.
  22. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 122(2), pages 775-805, 05.
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Citations

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Cited by:
  1. Wen-Tai Hsu & Tomoya Mori & Tony E. Smith, 2014. "Spatial Patterns and Size Distributions of Cities," KIER Working Papers, Kyoto University, Institute of Economic Research 882, Kyoto University, Institute of Economic Research.
  2. Pablo Fajgelbaum & Stephen J. Redding, 2014. "External Integration, Structural Transformation and Economic Development: Evidence From Argentina," CEP Discussion Papers, Centre for Economic Performance, LSE dp1273, Centre for Economic Performance, LSE.
  3. Duranton, Gilles & Puga, Diego, 2013. "The growth of cities," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9590, C.E.P.R. Discussion Papers.
  4. Sheard, Nicholas, 2014. "Airports and urban sectoral employment," Journal of Urban Economics, Elsevier, vol. 80(C), pages 133-152.
  5. Kristian Behrens & Giordano Mion & Yasusada Murata & Jens Südekum, 2011. "Spatial Frictions," CEP Discussion Papers, Centre for Economic Performance, LSE dp1108, Centre for Economic Performance, LSE.
  6. Stephen J. Redding & Matthew A. Turner, 2014. "Transportation Costs and the Spatial Organization of Economic Activity," CEP Discussion Papers, Centre for Economic Performance, LSE dp1277, Centre for Economic Performance, LSE.
  7. Sheard, Nicholas, 2012. "Airports and the Production of Goods and Services," Research Papers in Economics, Stockholm University, Department of Economics 2012:7, Stockholm University, Department of Economics, revised 17 Jan 2013.
  8. Diaz-Lanchas, Jorge & Llano, Carlos & Zofío, José Luis, 2013. "Trade margins, transport cost thresholds and market areas: Municipal freight flows and urban hierarchy," Working Papers in Economic Theory 2013/10, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
  9. Blonigen, Bruce A. & Cristea, Anca D., 2012. "Airports and Urban Growth: Evidence from a Quasi-Natural Policy Experiment," MPRA Paper 40304, University Library of Munich, Germany.
  10. A. Kerem Cosar & Banu Demir, 2014. "Domestic Road Infrastructure and International Trade: Evidence from Turkey," Koç University-TUSIAD Economic Research Forum Working Papers, Koc University-TUSIAD Economic Research Forum 1406, Koc University-TUSIAD Economic Research Forum.
  11. Rosa Sanchis-Guarner, 2012. "Driving Up Wages: The Effects of Road Construction in Great Britain," SERC Discussion Papers, Spatial Economics Research Centre, LSE 0120, Spatial Economics Research Centre, LSE.
  12. Zofío, José Luis & Condeço-Melhorado, Ana M. & Maroto-Sánchez, Andrés & Gutiérrez, Javier, 2011. "Decomposing generalized transport costs using index numbers: A geographical analysis of economic and infrastructure fundamentals," Working Papers in Economic Theory 2011/06, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
  13. Nicholas Sheard, 2012. "The effect of air transport on the production of goods and services," ERSA conference papers ersa12p429, European Regional Science Association.
  14. Pablo Fajgelbaum & Stephen J. Redding, 2014. "External Integration, Structural Transformation and Economic Development: Evidence from Argentina 1870-1914," NBER Working Papers 20217, National Bureau of Economic Research, Inc.
  15. Duranton, Gilles, 2014. "Growing through cities in developing countries," Policy Research Working Paper Series 6818, The World Bank.

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