IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/86199.html
   My bibliography  Save this paper

Bridge to Bigpush or Backwash? Market Integration, Reallocation, and Productivity Effects of Jamuna Bridge in Bangladesh

Author

Listed:
  • Blankespoor, Brian
  • Emran, M. Shahe
  • Shilpi, Forhad
  • Xu, Lu

Abstract

This paper uses a quasi-experimental study of a major bridge construction in Bangladesh to understand the effects of a large reduction in trade costs on the pattern of structural change and agricultural productivity. We develop a spatial general equilibrium model with a core and two hinterlands at the opposite sides separated by rivers and allow for productivity gains through agglomeration in both agriculture and manufacturing sectors. The model yields insights different from the standard core-periphery and trade models:(i) the newly connected hinterland may experience higher population density and agricultural productivity despite significant de-industrialization, (ii) even with increased specialization in agriculture, the share of agricultural employment may decline when inter-regional trade requires local services (e.g. processing and trading), and (iii) the strongest effects on employment structure are felt not necessarily in the areas next to the bridge but in the areas that move out of autarky as a result of the bridge. In empirical estimation, we use doubly robust estimators in a difference-in-difference design where the comparison hinterland comes from a region which was supposed to be connected to the core (capital city) by the proposed, but not yet constructed, Padma bridge due to idiosyncratic political factors. In the short run, we find significant labor reallocation from agriculture to services in the connected hinterland, but no perceptible effects on the employment share of manufacturing, population density, and night-lights. In the long run, the labor share of manufacturing declines in the treatment hinterland and increases in the core, consistent with the de-industrialization effect emphasized in core-periphery models. However, there are significant positive effects on population density, night light luminosity and agricultural yields in the treatment hinterland which contradict backwash effects of the bridge. The effects of the bridge on intersectoral labor allocation are spatially heterogeneous, with relatively weak effects in the areas close to the bridge.

Suggested Citation

  • Blankespoor, Brian & Emran, M. Shahe & Shilpi, Forhad & Xu, Lu, 2018. "Bridge to Bigpush or Backwash? Market Integration, Reallocation, and Productivity Effects of Jamuna Bridge in Bangladesh," MPRA Paper 86199, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:86199
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/86199/1/MPRA_paper_86199.pdf
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:aea:aecrev:v:108:y:2018:i:4-5:p:899-934 is not listed on IDEAS
    2. Redding, Stephen J. & Turner, Matthew A., 2015. "Transportation Costs and the Spatial Organization of Economic Activity," Handbook of Regional and Urban Economics, Elsevier.
    3. Starrett, David, 1978. "Market allocations of location choice in a model with free mobility," Journal of Economic Theory, Elsevier, vol. 17(1), pages 21-37, February.
    4. Adam Storeygard, 2016. "Farther on down the Road: Transport Costs, Trade and Urban Growth in Sub-Saharan Africa," Review of Economic Studies, Oxford University Press, vol. 83(3), pages 1263-1295.
    5. Minhaj Mahmud & Yasuyuki Sawada, 2018. "Infrastructure and well-being: employment effects of Jamuna bridge in Bangladesh," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 10(3), pages 327-340, July.
    6. Gilles Duranton & Peter M. Morrow & Matthew A. Turner, 2014. "Roads and Trade: Evidence from the US," Review of Economic Studies, Oxford University Press, vol. 81(2), pages 681-724.
    7. repec:tpr:restat:v:99:y:2017:i:3:p:435-448 is not listed on IDEAS
    8. Banerjee, Abhijit & Duflo, Esther & Qian, Nancy, 2012. "On the Road: Access to Transportation Infrastructure and Economic Growth in China," CEPR Discussion Papers 8874, C.E.P.R. Discussion Papers.
    9. Guy Michaels, 2008. "The Effect of Trade on the Demand for Skill: Evidence from the Interstate Highway System," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 683-701, November.
    10. Blankespoor,Brian & Bougna Lonla,Theophile & Garduno Rivera,Rafael & Selod,Harris, 2017. "Roads and the geography of economic activities in Mexico," Policy Research Working Paper Series 8226, The World Bank.
    11. repec:taf:jdevst:v:53:y:2017:i:4:p:465-480 is not listed on IDEAS
    12. Patrick Kline, 2011. "Oaxaca-Blinder as a Reweighting Estimator," American Economic Review, American Economic Association, vol. 101(3), pages 532-537, May.
    13. Claudia N. Berg & Uwe Deichmann & Yishen Liu & Harris Selod, 2017. "Transport Policies and Development," Journal of Development Studies, Taylor & Francis Journals, vol. 53(4), pages 465-480, April.
    14. Baum-Snow, Nathaniel & Brandt, Loren & Henderson, J. Vernon & Turner, Matthew A. & Zhang, Qinghua, 2017. "Roads, railroads and decentralization of Chinese cities," LSE Research Online Documents on Economics 67374, London School of Economics and Political Science, LSE Library.
    15. Steven Were Omamo, 1998. "Transport Costs and Smallholder Cropping Choices: An Application to Siaya District, Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 116-123.
    16. Guy Michaels & Ferdinand Rauch & Stephen J. Redding, 2012. "Urbanization and Structural Transformation," The Quarterly Journal of Economics, Oxford University Press, vol. 127(2), pages 535-586.
    17. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 775-805.
    18. Duranton, Gilles, 2015. "Roads and trade in Colombia," Economics of Transportation, Elsevier, vol. 4(1), pages 16-36.
    19. Asher,Samuel Edward & Novosad,Paul Michael, 2018. "Rural roads and local economic development," Policy Research Working Paper Series 8466, The World Bank.
    20. Benjamin Faber, 2014. "Trade Integration, Market Size, and Industrialization: Evidence from China's National Trunk Highway System," Review of Economic Studies, Oxford University Press, vol. 81(3), pages 1046-1070.
    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. Amrit Amirapu & M Niaz Asadullah & Zaki Wahhaj, 2018. "Marriage, Work and Migration: The Role of Infrastructure Development and Gender Norms," Studies in Economics 1810, School of Economics, University of Kent.

    More about this item

    Keywords

    Core-Periphery; Density; Deindustrialization; Agricultural Productivity; Bridge; Bigpush; Backwash; Agglomeration;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

    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:pra:mprapa:86199. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.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.