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Roads, exports and employment: Evidence from a developing country

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  • Volpe Martincus, Christian
  • Carballo, Jerónimo
  • Cusolito, Ana

Abstract

Domestic road programs are often justified on the basis of their presumed positive effects on firms' exports and accordingly on firms' employment. In this paper we evaluate this policy claim for Peru, a developing country whose regions were exposed to an asymmetric infrastructure shock. In so doing, we take advantage of detailed geo-referenced data on firm-level trade for the period 2003–2010 as well as on recent and historical road infrastructure. In particular, to identify the impacts of interest, we first exploit the dimensions of this dataset to account for regional-sectoral and even firm-level confounding factors through extensive sets of fixed effects. In addition, we conduct placebo exercises and carry out instrumental variable estimations whereby we instrument recent changes in the road network with the pre-Columbian Inca road network. Estimates concur in suggesting that improvements in transport infrastructure had a significant positive impact on firms' exports and thereby on firms' job growth.

Suggested Citation

  • Volpe Martincus, Christian & Carballo, Jerónimo & Cusolito, Ana, 2017. "Roads, exports and employment: Evidence from a developing country," Journal of Development Economics, Elsevier, vol. 125(C), pages 21-39.
  • Handle: RePEc:eee:deveco:v:125:y:2017:i:c:p:21-39
    DOI: 10.1016/j.jdeveco.2016.10.002
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    References listed on IDEAS

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    Cited by:

    1. Esteban Jaimovich, 2018. "Roadways, Input Sourcing, and Patterns of Specialization," DOUMENTOS DE TRABAJO LACEA 016394, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA.
    2. Athukorala, Prema-chandra & Narayanan, Suresh, 2018. "Economic corridors and regional development: The Malaysian experience," World Development, Elsevier, vol. 106(C), pages 1-14.
    3. Masashige Hamano & Wessel N. Vermeulen, 2017. "Adapting to within-country export barriers: Evidence from the Japan 2011 Tsunami," Working Papers 1706, Waseda University, Faculty of Political Science and Economics.
    4. Wouter (W.) Zant, 2017. "Bridges," Tinbergen Institute Discussion Papers 17-117/V, Tinbergen Institute, revised 08 Aug 2018.
    5. repec:eee:deveco:v:133:y:2018:i:c:p:375-395 is not listed on IDEAS

    More about this item

    Keywords

    Infrastructure; Exports; Employment; Peru;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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