JRC TECHNICAL REPORT - The ripple eﬀects of large-scale transport infrastructure investment
20 January 2023
Section 4 illustrates the application of the transport model to the road transport infrastructures investments of the ECP, and section 5 contains the results of the simulations carried out with the CGE model. [...] To plot the changes in transport costs on a map, we consider for each region the change in the harmonic weighted average of the trade costs to all regions.2 The impact of the investment is, on average, higher in the Eastern European regions targeted by the policy, but there are some interesting exceptions. [...] To understand the stark difference in the spillovers experienced by the regions in the East versus the South of Germany visible in Figure 7, Figure 8a shows the changes in exports of the German region of Mecklenburg Vorpommern (DE80), located on the country’s Eastern border, to all its EU regional export destinations. [...] We consider the following potential explanatory variables in a model with spillovers (measured as the per-capita GDP changes, in logs) as the dependent variable: the weighted average distance from the regions of Eastern Europe (distance, in logs); the change in the weighted harmonic average in transport costs of the region (Tchange); and the baseline trade exposure to Eastern Europe, calculated as. [...] The effects of trade intensity and especially the change in the weighted average transport cost have the expected sign, but only the effect of the coefficient of the change in transport cost is significant.