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Road infrastructure in Europe and Central Asia : does network quality affect trade ?

  • Shepherd, Ben
  • Wilson, John S.

The authors present a new database of minimum distance road routes connecting 138 cities in 27 countries across Europe and Central Asia. They use it to show that improved road network quality is robustly associated with higher intraregional trade flows. Gravity model simulations suggest that an ambitious but feasible road upgrade could increase trade by 50 percent over baseline, exceeding the expected gains from tariff reductions or trade facilitation programs of comparable scope. Cross-country spillovers due to overland transit are important: total intraregional trade couldbe increased by 30 percent by upgrading roads in just three countries-Albania, Hungary, and Romania.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4104.

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Date of creation: 01 Dec 2006
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Handle: RePEc:wbk:wbrwps:4104
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  1. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
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  13. Carrere, Celine, 2006. "Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model," European Economic Review, Elsevier, vol. 50(2), pages 223-247, February.
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  15. Nordås, Hildegunn Kyvik & Piermartini, Roberta, 2004. "Infrastructure and trade," WTO Staff Working Papers ERSD-2004-04, World Trade Organization (WTO), Economic Research and Statistics Division.
  16. Gaël Raballand, 2003. "Determinants of the Negative Impact of Being Landlocked on Trade: An Empirical Investigation Through the Central Asian Case," Comparative Economic Studies, Palgrave Macmillan, vol. 45(4), pages 520-536, December.
  17. Cravino, Javier & Lederman, Daniel, 2008. "Substitution between Foreign Capital in China, India, the Rest of the World, and Latin America: Much Ado about Nothing?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 953-976.
  18. Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. "Trading on Time," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.
  19. Santos Silva, J.M.C & Tenreyro, Silvana, 2005. "The Log of Gravity," CEPR Discussion Papers 5311, C.E.P.R. Discussion Papers.
  20. Buys, Piet & Deichmann, Uwe & Wheeler, David, 2006. "Road network upgrading and overland trade expansion in Sub-Saharan Africa," Policy Research Working Paper Series 4097, The World Bank.
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