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The World Is Not Yet Flat: Transport Costs Matter!

Author

Listed:
  • Kristian Behrens

    (Université du Québec à Montréal, National Research University Higher School of Economics, CIRPÉE, and CEPR)

  • W. Mark Brown

    (Statistics Canada)

  • Théophile Bougna

    (Université du Québec à Montréal and World Bank)

Abstract

Using microlevel commodity flow data and microgeographic plant-level data, we construct industry-specific ad valorem trucking rate series and measures of geographic concentration to provide evidence on the relationship between transport costs and agglomeration. We find that low-transport-cost industries display significantly more geographic concentration in the cross-sectional dimension and that falling transport costs agglomerate industries in the panel dimension. The effects are large: the fall in trucking rates between 1992 and 2008 implied a 20% increase in geographic concentration on average, all else equal.

Suggested Citation

  • Kristian Behrens & W. Mark Brown & Théophile Bougna, 2018. "The World Is Not Yet Flat: Transport Costs Matter!," The Review of Economics and Statistics, MIT Press, vol. 100(4), pages 712-724, October.
    • Handle: RePEc:tpr:restat:v:100:y:2018:i:4:p:712-724
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    Cited by:

    1. Branco, Catarina & Dohse, Dirk C. & Pereira dos Santos, João & Tavares, José, 2023. "Nobody’s gonna slow me down? The effects of a transportation cost shock on firm performance and behavior," Journal of Urban Economics, Elsevier, vol. 136(C).
    2. Tomoya Mori, 2017. "Agglomeration," KIER Working Papers 960, Kyoto University, Institute of Economic Research.
    3. Arsène Aurelien NJAMEN KENGDO & Luc NEMBOT NDEFFO & Désiré AVOM, 2020. "The Effect of Foreign Debt on Economic Growth in Sub-Saharan African Sub-Regions," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 109-114.
    4. Ekaterina Aleksandrova & Kristian Behrens & Maria Kuznetsova, 2020. "Manufacturing (co)agglomeration in a transition country: Evidence from Russia," Journal of Regional Science, Wiley Blackwell, vol. 60(1), pages 88-128, January.
    5. Kristian Behrens, 2016. "Agglomeration and clusters: Tools and insights from coagglomeration patterns," Canadian Journal of Economics, Canadian Economics Association, vol. 49(4), pages 1293-1339, November.
    6. Arsène Aurelien Njamen Kengdo & Tii N. Nchofoung & Philemon Bonaventure Ntang, 2020. "Effect of external debt on the level of infrastructure in Africa," Economics Bulletin, AccessEcon, vol. 40(4), pages 3349-3366.
    7. Lenaerts, Bert & Allroggen, Florian & Malina, Robert, 2021. "The economic impact of aviation: A review on the role of market access," Journal of Air Transport Management, Elsevier, vol. 91(C).
    8. Robby K. Bemrose & W. Mark Brown & Jesse Tweedle, 2020. "Going the distance: Estimating the effect of provincial borders on trade when geography (and everything else) matters," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 1098-1131, August.
    9. Armando J. Garcia Pires & José Pedro Pontes, 2021. "(De)Industrialization, Technology and Transportation," Open Economies Review, Springer, vol. 32(3), pages 527-538, July.
    10. Zhian Yang & Pingzhang Lv & Shiqiang Sun, 2025. "The Impact of New Infrastructure Investment on the International Tourism Industry: Evidence from Provincial-Level Panel Data in China," Sustainability, MDPI, vol. 17(6), pages 1-19, March.
    11. Alam, Muneeza & Herrera Dappe, Matías & Melecky, Martin & Goldblatt, Ran, 2022. "Wider economic benefits of transport corridors: Evidence from international development organizations," Journal of Development Economics, Elsevier, vol. 158(C).
    12. Njamen Kengdo, Arsène Aurelien & Kitio, Victor, 2025. "The defence sector faces the resource curse: Effect of natural resource rents on defence spending in Sub-Saharan Africa," Resources Policy, Elsevier, vol. 105(C).
    13. Damiaan Persyn & Javier Barbero & Jorge Díaz‐Lanchas & Patrizio Lecca & Giovanni Mandras & Simone Salotti, 2023. "The ripple effects of large‐scale transport infrastructure investment," Journal of Regional Science, Wiley Blackwell, vol. 63(4), pages 755-792, September.
    14. Behrens, Kristian & Sharunova, Vera, 2015. "Inter- and intra-firm linkages: Evidence from microgeographic location patterns," CEPR Discussion Papers 10921, C.E.P.R. Discussion Papers.
    15. Edilberto Tiago de Almeida & Raul da Mota Silveira Neto & Roberta de Moraes Rocha, 2022. "Manufacturing location patterns in Brazil," Papers in Regional Science, Wiley Blackwell, vol. 101(4), pages 839-873, August.
    16. Cosar,Ahmet Kerem, 2022. "Overland Transport Costs : A Review," Policy Research Working Paper Series 10156, The World Bank.
    17. Behrens, Kristian & Guillain, Rachel, 2017. "The determinants of coagglomeration: Evidence from functional employment patterns," CEPR Discussion Papers 11884, C.E.P.R. Discussion Papers.
    18. Kristian Behrens & Brahim Boualam & Julien Martin, 2016. "The resilience of the Canadian textile industries and clusters to shocks, 2001-2013," CIRANO Project Reports 2016rp-05, CIRANO.

    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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