IDEAS home Printed from https://ideas.repec.org/p/got/gotcrc/112.html
   My bibliography  Save this paper

Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders

Author

Listed:
  • Zhigang Li

    (University of Hong Kong)

  • Xiaohua Yu

    (Georg-August-University Göttingen)

  • Yinchu Zeng

    (Renmin University of China)

  • Rainer Holst

    (Georg-August-University Göttingen)

Abstract

Using a unique survey data on agricultural traders in China in 2004, this study provides direct evidence on the significance of inter-regional trade barriers and their key components. Our major findings are as follows. (1) The trade barriers within China are fairly small, accounting for about 20 percent of trade value. (2) Transport and non-transport costs respectively contribute 42% and 58% to the trade barriers. (3) Labor and transport-related taxes are the two largest proportions of total transport costs, and respectively accounts for 35% and 30%. (4) Artificial trade barriers created by the government are not sizable as we perceived. (5) Road quality is crucial for reducing transport costs within China: Increasing transport speed by 1 km per hour, the total transport costs for Chinese agricultural traders would decrease by 0.6 percent mainly due to improved fuel-burning efficiency and reduced labor requirement.

Suggested Citation

  • Zhigang Li & Xiaohua Yu & Yinchu Zeng & Rainer Holst, 2012. "Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 112, Courant Research Centre PEG.
  • Handle: RePEc:got:gotcrc:112
    as

    Download full text from publisher

    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_112.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jane Korinek & Patricia Sourdin, 2010. "Clarifying Trade Costs: Maritime Transport and Its Effect on Agricultural Trade," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(3), pages 417-435.
    2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    3. Jacoby, Hanan G. & Minten, Bart, 2009. "On measuring the benefits of lower transport costs," Journal of Development Economics, Elsevier, vol. 89(1), pages 28-38, May.
    4. Dorosh, Paul A. & Stifel, David & Minten, Bart, 2003. "Transaction costs and agricultural productivity," MSSD discussion papers 56, International Food Policy Research Institute (IFPRI).
    5. Yu, Xiaohua & Abler, David G. & Zeng, Yinchu, 2009. "Contractual Arrangements of Traders in Chinese Wholesale Markets," 2009 Conference, August 16-22, 2009, Beijing, China 51399, International Association of Agricultural Economists.
    6. Michael E. Waugh, 2010. "International Trade and Income Differences," American Economic Review, American Economic Association, vol. 100(5), pages 2093-2124, December.
    7. Binswanger, Hans P. & Khandker, Shahidur R. & Rosenzweig, Mark R., 1993. "How infrastructure and financial institutions affect agricultural output and investment in India," Journal of Development Economics, Elsevier, vol. 41(2), pages 337-366, August.
    8. Fan, Shenggen & Zhang, Xiaobo, 2004. "Infrastructure and regional economic development in rural China," China Economic Review, Elsevier, vol. 15(2), pages 203-214.
    9. Amiti, Mary & Smarzynska Javorcik, Beata, 2008. "Trade costs and location of foreign firms in China," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 129-149, February.
    10. Angel De la Fuente & Jose Emilio Bosca, 2011. "Gasto educativo por regiones y niveles en 2005," Working Papers 1119, BBVA Bank, Economic Research Department.
    11. Tian, Xu & Yu, Xiaohua, 2012. "The Enigmas of TFP in China: A meta-analysis," China Economic Review, Elsevier, vol. 23(2), pages 396-414.
    12. Albert Park & Hehui Jin & Scott Rozelle & Jikun Huang, 2002. "Market Emergence and Transition: Arbitrage, Transaction Costs, and Autarky in China's Grain Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 67-82.
    13. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," NBER Working Papers 7828, National Bureau of Economic Research, Inc.
    14. 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.
    15. Fan, Shenggen & Chan-Kang, Connie, 2004. "Road development, economic growth, and poverty reduction in China," DSGD discussion papers 12, International Food Policy Research Institute (IFPRI).
    16. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
    17. Poncet, Sandra, 2003. "Measuring Chinese domestic and international integration," China Economic Review, Elsevier, vol. 14(1), pages 1-21.
    18. Xiaohua Yu & David Abler, 2009. "The Demand for Food Quality in Rural China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 57-69.
    19. Minten, Bart & Randrianarison, Lalaina & Swinnen, Johan F.M., 2009. "Global Retail Chains and Poor Farmers: Evidence from Madagascar," World Development, Elsevier, vol. 37(11), pages 1728-1741, November.
    20. 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, July.
    21. 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.
    22. KC Fung & Alicia Garcia-Herrero & Mario Nigrinis Ospina, 2013. "Latin American Commodity Export Concentration: Is There a China Effect?," Working Papers 1306, BBVA Bank, Economic Research Department.
    23. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1091-1135.
    24. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Han & Li, Zhigang, 2013. "Road investments and inventory reduction: Firm level evidence from China," Journal of Urban Economics, Elsevier, vol. 76(C), pages 43-52.
    2. repec:eee:regeco:v:65:y:2017:i:c:p:116-126 is not listed on IDEAS
    3. Robert Holzmann & Richard Hinz & David Tuesta, 2012. "Early Lessons from Country Experience with Matching Contribution Schemes for Pensions," Working Papers 1231, BBVA Bank, Economic Research Department.
    4. Li, Zhigang & Chen, Yu, 2013. "Estimating the social return to transport infrastructure: A price-difference approach applied to a quasi-experiment," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 669-683.
    5. Yu Qin, 2016. "China's Transport Infrastructure Investment: Past, Present, and Future," Asian Economic Policy Review, Japan Center for Economic Research, vol. 11(2), pages 199-217, July.

    More about this item

    Keywords

    Transport Costs; China; Agricultural Traders; Infrastructure;

    JEL classification:

    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:got:gotcrc:112. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dominik Noe). General contact details of provider: http://www.uni-goettingen.de/en/82144.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.