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Estimating the impact of transport efficiency on trade costs: Evidence from Chinese agricultural traders

  • Li, Zhigang
  • Yu, Xiaohua
  • Zeng, Yinchu

Using a unique survey data on agricultural traders in China in 2004, this study provides direct evidence on significance of interregional transport costs and their key determinants. Our major findings are as follows: (1) the trade barriers within China are dominated by transport-related costs but not artificial barriers, approximated by tolls and fines; (2) Labor and fuels costs are the most significant component of transport costs; (3) road quality is very important for transportation efficiency. Our results indicate that if increasing transport speed by 1 km per hour now, the fuel costs and total direct transportation costs for Chinese traders would reduce by 1.3% and 0.7% respectively.

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File URL: http://purl.umn.edu/114384
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Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114384.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114384
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  1. Shahidur R. Khandker & Zaid Bakht & Gayatri B. Koolwal, 2009. "The Poverty Impact of Rural Roads: Evidence from Bangladesh," Economic Development and Cultural Change, University of Chicago Press, vol. 57(4), pages 685-722, 07.
  2. Amiti, Mary & Javorcik, Beata Smarzynska, 2005. "Trade costs and location of foreign firms in China," Policy Research Working Paper Series 3564, The World Bank.
  3. Fan, Shenggen & Zhang, Xiaobo, 2004. "Infrastructure and regional economic development in rural China," China Economic Review, Elsevier, vol. 15(2), pages 203-214.
  4. Jikun Huang & Scott Rozelle & Min Chang, 2004. "Tracking Distortions in Agriculture: China and Its Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, vol. 18(1), pages 59-84.
  5. Binswanger, Hans P. & Khandker, Shahidur R & Rosenzweig, Mark R., 1989. "How infrastructure and financial institutions affect agricultural output and investment in India," Policy Research Working Paper Series 163, The World Bank.
  6. Poncet, Sandra, 2003. "Measuring Chinese domestic and international integration," China Economic Review, Elsevier, vol. 14(1), pages 1-21.
  7. Jacoby, Hanan G. & Minten, Bart, 2008. "On measuring the benefits of lower transport costs," Policy Research Working Paper Series 4484, The World Bank.
  8. Carsten A. Holz, 2009. "No Razor's Edge: Reexamining Alwyn Young's Evidence for Increasing Interprovincial Trade Barriers in China," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 599-616, August.
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