Determinants of transport costs: Are they uniform across countries?
AbstractThe author shows with pooled OLS estimations based on transport margins from international social accounting data that investments in improved road infrastructure have the potential to significantly reduce transport costs. However, this result can only be clearly confirmed for industrial countries and is of primary importance for production and transportation of agricultural goods. For developing and transition countries, in contrast, the author finds other determinants such as weather conditions to be more important in determining transport costs. A key variable, especially in these countries, is corruption. Very high corruption has the potential to prevent positive effects from road infrastructure on transport costs or to even reverse them. This paper contributes to the literature on infrastructure investment by introducing and applying an internationally comparable measure of transport costs which can be calculated for a large and growing number of countries. The author concludes that investments in transport infrastructure can have substantial positive effects especially on agricultural production and the efficient marketing of agricultural products but only if specific additional conditions are given. --
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2012-54.
Date of creation: 2012
Date of revision:
infrastructure; transport networks; transport costs; agriculture; public investment; development;
Find related papers by JEL classification:
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-11 (All new papers)
- NEP-INT-2012-11-11 (International Trade)
- NEP-TRE-2012-11-11 (Transport Economics)
- NEP-URE-2012-11-11 (Urban & Real Estate Economics)
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