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Geographical Simulation Analysis for Logistics Enhancement in Asia

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  • Kenmei Tsubota
  • Satoru Kumagai
  • Kazunobu Hayakawa
  • Ikumo Isono
  • Souknilanh Keola

Abstract

The purpose of this paper is to evaluate the impact of trade cost reduction on the Asian economy by employing a sub-national level model based on New Economic Geography. Our model comprises seven sectors, including manufacturing and non-manufacturing sectors, and 1,715 regions in 18 countries/economies in Asia in addition to the two economies of the US and the European Union. As a Computable General Equilibrium of New Economic Geography, we have developed a simulation model for multi-region and multi-sector that consists of the agriculture sector, five manufacturing sectors and the service sector. We assume that there are increasing returns to scale in manufacturing and service sectors. We have introduced modal choice and separation of trade costs respect to physical and non-physical infrastructure. While physical infrastructure improvements are expected to have a drastic impact on the distribution of economic activities, we found that the positive effects of physical transport infrastructure improvements are rather limited to the neighboring regions of the projects and that the existing concentrations of economic activities are rather persistent. Furthermore, we also find that, besides the ongoing physical transport infrastructure improvements, further trade facilitation or tackling behind-the-border issues among countries could enhance the prevalence of economic growth in each country.

Suggested Citation

  • Kenmei Tsubota & Satoru Kumagai & Kazunobu Hayakawa & Ikumo Isono & Souknilanh Keola, 2013. "Geographical Simulation Analysis for Logistics Enhancement in Asia," EcoMod2013 5006, EcoMod.
  • Handle: RePEc:ekd:004912:5006
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    References listed on IDEAS

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    Cited by:

    1. Hidetoshi Nishimura & Fukunari Kimura & Masahito Ambashi & Souknilanh Keola, . "Lao PDR at the Crossroads: Industrial Development Strategies 2016–2030," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2015-rpr-02 edited by Hidetoshi Nishimura & Fukunari Kimura & Masahito Ambashi & Souknilanh Keola, December.
    2. Peter Morgan & Michael G. Plummer & Ganeshan Wignaraja & Fan Zhai, 2015. "Economic Implications of Deeper South Asian–Southeast Asian Integration: A CGE Approach," Asian Economic Papers, MIT Press, vol. 14(3), pages 63-81, Fall.
    3. Isono, Ikumo & Kumagai, Satoru, 2017. "Geographical simulation analysis of the development of Thilawa and Myanmar," IDE Discussion Papers 639, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Ikumo Isono & Satoru Kumagai & Fukunari Kimura, 2012. "Agglomeration And Dispersion In China And Asean: A Geographical Simulation Analysis," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 1-16.
    5. Kimura, Fukunari & Obashi, Ayako, 2011. "Production Networks in East Asia: What We Know So Far," ADBI Working Papers 320, Asian Development Bank Institute.
    6. Toshihiro KUDO & Satoru KUMAGAI & So UMEZAKI, 2013. "Making Myanmar the Star Growth Performer in ASEAN in the Next Decade: A Proposal of Five Growth Strategies," Working Papers DP-2013-19, Economic Research Institute for ASEAN and East Asia (ERIA).
    7. Ikumo Isono & Satoru Kumagai, 2013. "Long-run Economic Impacts of Thai Flooding: Geographical Simulation Analysis," Working Papers DP-2013-08, Economic Research Institute for ASEAN and East Asia (ERIA).
    8. Kudo, Toshihiro & Kumagai, Satoru & Umezaki, So, 2013. "Five growth strategies for Myanmar : re-engagement with the global economy," IDE Discussion Papers 427, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    9. Isono, Ikumo & Ishido, Hikari, 2016. "Service liberalization in Lao PDR," IDE Discussion Papers 559, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    10. Chen, Ching-mu & Kumagai, Satoru, 2016. "Economic impacts of the Kra Canal : an application of the automatic calculation of sea distances by a GIS," IDE Discussion Papers 568, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    11. repec:era:eriabk:2017-rpr-18 is not listed on IDEAS
    12. Kumagai, Satoru & Isono, Ikumo & Hayakawa, Kazunobu, 2018. "Economic impacts of high-speed rail between Kuala Lumpur and Singapore : an application of IDE-GSM," IDE Discussion Papers 700, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    13. Ikumo Isono & Satoru Kumagai, 2016. "Economic Impacts of Improved Connectivity for ASEAN: An Application of the Geographical Simulation Model," Asian Economic Policy Review, Japan Center for Economic Research, vol. 11(2), pages 290-306, July.
    14. Kudo, Toshihiro & Kumagai, Satoru, 2012. "Two-polar growth strategy in Myanmar : seeking "high" and "balanced" development," IDE Discussion Papers 371, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    15. Kumagai, Satoru & Gokan Toshitaka & Keola, Souknilanh, 2018. "Economic impacts of economic corridors in Mongolia : an application of IDE-GSM," IDE Discussion Papers 701, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    16. Keola, Souknilanh & Kumagai, Satoru, 2016. "Measuring population mobility speed from space," IDE Discussion Papers 574, Institute of Developing Economies, Japan External Trade Organization(JETRO).

    More about this item

    Keywords

    Bangladesh; Brunei Darussalam; Cambodia; China; Hong Kong; India; Indonesia; Japan; Korea; Lao PDR; Macao; Myanmar; Malaysia; Philippines; Singapore; Taiwan; Thailand and Vietnam with rest of the world; Regional modeling; Impact and scenario analysis;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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