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Density economies and transport geography: Evidence from the container shipping industry

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  • Xu, Hangtian
  • Itoh, Hidekazu

Abstract

By exploiting the 1995 Hanshin earthquake in western Japan as an exogenous shock to the container traffic of Northeast Asia, our study shows that economies of density in the transportation sector can influence transport geography. This earthquake caused great damage to the port of Kobe, resulting in a diversion of its container traffic to the nearby port of Busan, which increased markedly after this windfall. The strengthened economies of transport density therefore allowed Busan to expand its hinterland to regions whose container shipping operations had not even been directly affected by the earthquake, such as eastern Japan. The empirical evidence from the port choice dynamics in eastern Japan supports this mechanism. Substantial diversions of container traffic occurred after 1995 from the major ports in this region to the port of Busan. Furthermore, these unintended container shipping diversions led to a structural change in the manufacturing sector of related regions after the late 1990s.

Suggested Citation

  • Xu, Hangtian & Itoh, Hidekazu, 2018. "Density economies and transport geography: Evidence from the container shipping industry," Journal of Urban Economics, Elsevier, vol. 105(C), pages 121-132.
    • Handle: RePEc:eee:juecon:v:105:y:2018:i:c:p:121-132
    DOI: 10.1016/j.jue.2017.09.002
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    Cited by:

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    2. Yao He & Yongchun Yang & Meimei Wang & Xudong Zhang, 2022. "Resilience Analysis of Container Port Shipping Network Structure: The Case of China," Sustainability, MDPI, vol. 14(15), pages 1-17, August.
    3. David Guerrero, 2020. "A global analysis of hinterlands from a European perspective. In: Global Logistics Network Modelling and Policy: Quantification and Analysis for International Freight," Post-Print hal-02551947, HAL.
    4. Ducruet, Cesar & Tsubota, Kenmei, 2018. "Regional disintegration in South Asia : evidence from the end of the British Empire on maritime networks," IDE Discussion Papers 708, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. Laure Rousset & César Ducruet, 2020. "Disruptions in Spatial Networks: a Comparative Study of Major Shocks Affecting Ports and Shipping Patterns," Networks and Spatial Economics, Springer, vol. 20(2), pages 423-447, June.
    6. Guerrero, David & Letrouit, Lucie & Pais-Montes, Carlos, 2022. "The container transport system during Covid-19: An analysis through the prism of complex networks," Transport Policy, Elsevier, vol. 115(C), pages 113-125.
    7. Olabisi Michael Olapoju, 2023. "Appraising the impact of COVID-19 on trading volume of selected vessel types in sub-Saharan Africa," Journal of Shipping and Trade, Springer, vol. 8(1), pages 1-12, December.

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    More about this item

    Keywords

    Hub port; Density economies; Transportation; Northeast Asia;
    All these keywords.

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • F19 - International Economics - - Trade - - - Other

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