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Trade, Infrastructure, and Roadways in Europe and Central Asia: New Empirical Evidence

Author

Listed:
  • Shepherd, Ben

    () (The World Bank)

  • Wilson, John S.

    (The World Bank)

Abstract

Infrastructure quality is a crucial determinant of trade. To assess the importance of regional infrastructure externalities, we use detailed overland transit information from an original road network database. Gravity model simulations suggest that an ambitious but feasible road upgrade could increase trade by 50% over baseline, exceeding the expected gains from tariff reductions or trade facilitation programs of comparable scope. Cross-country spillovers due to overland transit are very large: total intraregional trade could be increased by 30% by upgrading roads in just three countries—Albania, Hungary and Romania. These results bolster the case for regional coordination of infrastructure investments.

Suggested Citation

  • Shepherd, Ben & Wilson, John S., 2007. "Trade, Infrastructure, and Roadways in Europe and Central Asia: New Empirical Evidence," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 723-747.
  • Handle: RePEc:ris:integr:0413
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    Citations

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    Cited by:

    1. Yann Duval & Chorthip Utoktham, 2009. "Behind-the-Border Trade Facilitation in Asia-Pacific: Cost of Trade, Credit Information, Contract Enforcement and Regulatory Coherence," Working Paper Series 209, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    2. Tarasov, Alexander & Felbermayr, Gabriel, 2014. "Trade and the Spatial Distribution of Transport Infrastructure," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100511, Verein für Socialpolitik / German Economic Association.
    3. Bernard Hoekman & Ben Shepherd, 2013. "Who Profits From Trade Facilitation Initiatives?," RSCAS Working Papers 2013/49, European University Institute.
    4. Yue Li & John S. Wilson, 2009. "Trade Facilitation and Expanding the Benefits of Trade: Evidence from Firm Leval Data," Working Papers 7109, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    5. Shepherd, Ben & Wilson, John S., 2009. "Trade facilitation in ASEAN member countries: Measuring progress and assessing priorities," Journal of Asian Economics, Elsevier, vol. 20(4), pages 367-383, September.

    More about this item

    Keywords

    International Trade; Europe and Central Asia; Road Transport; Trade Facilitation; Gravity Model;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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