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Is distance a good proxy for transport costs? The case of competing transport modes

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  • Martínez-Zarzoso, Inmaculada
  • Nowak-Lehmann D., Felicitas

Abstract

In this paper, we analyze separately the determinants of maritime transport and road transport costs for Spanish exports to Poland and Turkey (markets for which maritime and road transport are competing modes) and investigate the different effects of these costs on international trade. First, we investigate the extent to which maritime and road transport costs depend on different factors such as unit values, distances, transport conditions, service structures, and service quality. Second, we analyze the relative importance of road and maritime transport costs in comparison with distance measures as determinants of trade flows. The main results of this investigation indicate that real distance is not a good proxy for transportation costs and identify the central variables influencing road and maritime transportation costs: for both modes, transport conditions are strong determinants, whereas efficiency and service quality are more important for maritime transport costs, and geographical distance is more important for road transport. Road and maritime transport costs are central explanatory factors of exports and they seem to deter trade to a greater extent than road or maritime transit time when endogeneity is considered.

Suggested Citation

  • Martínez-Zarzoso, Inmaculada & Nowak-Lehmann D., Felicitas, 2006. "Is distance a good proxy for transport costs? The case of competing transport modes," Center for European, Governance and Economic Development Research Discussion Papers 54, University of Goettingen, Department of Economics.
  • Handle: RePEc:zbw:cegedp:54
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    Cited by:

    1. Borchert, Ingo & Mattoo, Aaditya, 2016. "The trade reducing effects of restrictions on liner shippingAuthor-Name: Bertho, Fabien," Journal of Comparative Economics, Elsevier, vol. 44(2), pages 231-242.
    2. Zofío, Jose L. & Condeço-Melhorado, Ana M. & Maroto-Sánchez, Andrés & Gutiérrez, Javier, 2014. "Generalized transport costs and index numbers: A geographical analysis of economic and infrastructure fundamentals," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 141-157.
    3. Enrico Pastori & Miriam Tagliavia & Enrico Tosti & Simonetta Zappa, 2014. "The survey on international freight rates in Italy: methods and results," Questioni di Economia e Finanza (Occasional Papers) 223, Bank of Italy, Economic Research and International Relations Area.
    4. repec:spr:manint:v:55:y:2015:i:1:d:10.1007_s11575-014-0233-4 is not listed on IDEAS
    5. Gordon Wilmsmeier & Inmaculada Martínez-Zarzoso, 2009. "Determinants of maritime transport costs -- a panel data analysis for Latin American trade," Transportation Planning and Technology, Taylor & Francis Journals, vol. 33(1), pages 105-121, October.
    6. Jordan Schwartz & José Luis Guasch & Gordon Wilmsmeier, 2009. "Logistics, Transport and Food Prices in LAC: Policy Guidance for Improving Efficiency and Reducing Costs," IDB Publications (Working Papers) 9324, Inter-American Development Bank.
    7. Gomez-Herrera, Estrella & Martens, Bertin & Turlea, Geomina, 2014. "The drivers and impediments for cross-border e-commerce in the EU," Information Economics and Policy, Elsevier, vol. 28(C), pages 83-96.
    8. De Oliveira, Gabriel Figueiredo, 2014. "Determinants of European freight rates: The role of market power and trade imbalance," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 62(C), pages 23-33.
    9. Laura Márquez-Ramos & Inmaculada Martínez-Zarzoso & Eva Pérez-García & Gordon Wilmsmeier, 2011. "“Special Issue on Latin-American Research” Maritime Networks, Services Structure and Maritime Trade," Networks and Spatial Economics, Springer, vol. 11(3), pages 555-576, September.
    10. Inmaculada Martínez-Zarzoso & Gordon Wilmsmeier, 2010. "Freight Rates and the Margins of Intra-Latin American Maritime Trade," Ibero America Institute for Econ. Research (IAI) Discussion Papers 201, Ibero-America Institute for Economic Research.
    11. Jordan Schwartz & José Luis Guasch & Gordon Wilmsmeier, 2009. "Logistics, Transport and Food Prices in LAC: Policy Guidance for Improving Efficiency and Reducing Costs," IDB Publications (Working Papers) 2541, Inter-American Development Bank.

    More about this item

    Keywords

    transport costs; transport mode; Spanish exports; international trade;

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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