cover image: Road Capacity, Domestic Trade and Regional Outcomes

20.500.12592/p38vgk

Road Capacity, Domestic Trade and Regional Outcomes

1 Sep 2021

What is the impact on intranational trade and regional economic outcomes when the quality and lane capacity of an existing paved road network is expanded significantly? This paper investigates this question for the case of Turkey, which undertook a large-scale public investment in roads during the 2000s. Using spatially disaggregated data on road upgrades and domestic transactions, the paper estimates a large positive impact of reduced travel times on trade as well as local manufacturing employment and wages. A quantitative exercise using a workhorse model of spatial equilibrium implies heterogeneous effects across locations, with aggregate real income gains reaching 2–3 percent in the long run. Reductions in travel times increased the local employment-to-population ratio but had no effect on local population. The model is extended by endogenizing the labor supply decision to capture this finding. The model-implied elasticity of employment rates to travel time reductions captures about one-third of the empirical elasticity.
trade transport infrastructure road infrastructure trade logistics international economics and trade :: export competitiveness private sector development :: private sector economics infrastructure economics and finance :: infrastructure economics international economics and trade :: trade and regional integration transport :: roads & highways

Authors

Cosar, A. Kerem, Demir, Banu, Ghose, Devaki, Young, Nathaniel

Collection(s)
Policy Research Working Papers
DOI
http://dx.doi.org/10.1596/1813-9450-9772
Googlescholar linkpresent
yes
Identifier externaldocumentum
090224b088985be1_1_0
Identifier internaldocumentum
33409317
Published in
United States of America
RelationisPartofseries
Policy Research Working Paper;No. 9772
Report
WPS9772
Rights
CC BY 3.0 IGO
Rights Holder
World Bank
Rights URI
http://creativecommons.org/licenses/by/3.0/igo
UNIT
Development Research Group, Development Economics
URI
http://hdl.handle.net/10986/36280
citation
“Cosar, A. Kerem; Demir, Banu; Ghose, Devaki; Young, Nathaniel. 2021. Road Capacity, Domestic Trade and Regional Outcomes . Policy Research Working Paper;No. 9772. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/36280 License: CC BY 3.0 IGO.”
date disclosure
2021-09-13

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