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The Local Impact of Containerization

Author

Listed:
  • Leah Brooks
  • Nicolas Gendron-Carrier
  • Gisela Rua

Abstract

We investigate how containerization impacts local economic activity. Containerization is premised on a simple insight: packaging goods for waterborne trade into a standardized container makes them dramatically cheaper to move. We use a novel cost-shifter instrument -- port depth pre-containerization -- to contend with the non-random adoption of containerization by ports. Container ships sit much deeper in the water than their predecessors, making initially deep ports cheaper to containerize. Consistent with New Economic Geography models, we find that counties near container ports grow an additional 70 percent from 1950 to 2010. Gains predominate in counties with initially low population density and manufacturing.

Suggested Citation

  • Leah Brooks & Nicolas Gendron-Carrier & Gisela Rua, 2018. "The Local Impact of Containerization," Finance and Economics Discussion Series 2018-045, Board of Governors of the Federal Reserve System (US).
  • Handle: RePEc:fip:fedgfe:2018-45
    DOI: 10.17016/FEDS.2018.045
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    File URL: https://www.federalreserve.gov/econres/feds/files/2018045pap.pdf
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    References listed on IDEAS

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    14. repec:eee:inecon:v:114:y:2018:i:c:p:331-345 is not listed on IDEAS
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    Cited by:

    1. Carlo Altomonte & Laura Bonacorsi & Italo Colantobe, 2018. "Trade and Growth in the Age of Global Value Chains," BAFFI CAREFIN Working Papers 1897, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.

    More about this item

    Keywords

    Containerization ; Globalization ; Local economic activity;

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F15 - International Economics - - Trade - - - Economic Integration

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