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Determinants of transport costs: Are they uniform across countries?

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  • Schürenberg-Frosch, Hannah

Abstract

The author shows with pooled OLS estimations based on transport margins from international social accounting data that investments in improved road infrastructure have the potential to significantly reduce transport costs. However, this result can only be clearly confirmed for industrial countries and is of primary importance for production and transportation of agricultural goods. For developing and transition countries, in contrast, the author finds other determinants such as weather conditions to be more important in determining transport costs. A key variable, especially in these countries, is corruption. Very high corruption has the potential to prevent positive effects from road infrastructure on transport costs or to even reverse them. This paper contributes to the literature on infrastructure investment by introducing and applying an internationally comparable measure of transport costs which can be calculated for a large and growing number of countries. The author concludes that investments in transport infrastructure can have substantial positive effects especially on agricultural production and the efficient marketing of agricultural products but only if specific additional conditions are given.

Suggested Citation

  • Schürenberg-Frosch, Hannah, 2012. "Determinants of transport costs: Are they uniform across countries?," Economics Discussion Papers 2012-54, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwedp:201254
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    References listed on IDEAS

    as
    1. Jenks, Leland H., 1944. "Railroads as an Economic Force in American Development," The Journal of Economic History, Cambridge University Press, vol. 4(01), pages 1-20, May.
    2. Canning, David & Bennathan, Esra, 2000. "The social rate of return on infrastructure investments," Policy Research Working Paper Series 2390, The World Bank.
    3. Shenggen Fan & Peter Hazell & Sukhadeo Thorat, 2000. "Government Spending, Growth and Poverty in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1038-1051.
    4. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    5. Fay, Marianne & Yepes, Tito, 2003. "Investing in infrastructure : what is needed from 2000 to 2010?," Policy Research Working Paper Series 3102, The World Bank.
    6. Fremdling, Rainer, 1977. "Railroads and German Economic Growth: A Leading Sector Analysis with a Comparison to the United States and Great Britain," The Journal of Economic History, Cambridge University Press, vol. 37(03), pages 583-604, September.
    7. Ram, Rati, 1996. "Productivity of public and private investment in developing countries: A broad international perspective," World Development, Elsevier, vol. 24(8), pages 1373-1378, August.
    8. Javier Escobal & Carmen Ponce, 2003. "The benefits of rural roads. Enhancing income opportunities for the rural poor," Documentos de Investigación dt40b, Grupo de Análisis para el Desarrollo (GRADE).
    9. Naude, Wim & Matthee, Marianne, 2007. "The Significance of Transport Costs in Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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    More about this item

    Keywords

    infrastructure; transport networks; transport costs; agriculture; public investment; development;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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