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Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders

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  • Li, Zhigang
  • Yu, Xiaohua
  • Zeng, Yinchu
  • Holst, Rainer

Abstract

Using a unique survey data on agricultural traders in China in 2004, this study provides direct evidence on the significance of inter-regional trade barriers and their key components. Our major findings are as follows. (1) The trade barriers within China are fairly small, accounting for about 20% of trade value. (2) Transport and non-transport costs respectively contribute 42% and 58% to the trade barriers. (3) Labor and transport-related taxes are the two largest proportions of total transport costs, and respectively account for 35% and 30%. (4) Artificial trade barriers created by the government are not sizable as we perceived. (5) Road quality is crucial for reducing transport costs within China: increasing transport speed by 1km per hour, the total transport costs for Chinese agricultural traders would decrease by 0.6%, mainly due to improved fuel-burning efficiency and reduced labor requirement.

Suggested Citation

  • Li, Zhigang & Yu, Xiaohua & Zeng, Yinchu & Holst, Rainer, 2012. "Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders," China Economic Review, Elsevier, vol. 23(4), pages 1003-1010.
    • Handle: RePEc:eee:chieco:v:23:y:2012:i:4:p:1003-1010
    DOI: 10.1016/j.chieco.2012.05.001
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    5. Jin, Gang & Yu, Binbin & Shen, Kunrong, 2021. "Domestic trade and energy productivity in China: An inverted U-shaped relationship," Energy Economics, Elsevier, vol. 97(C).
    6. Li, Zhigang & Chen, Yu, 2013. "Estimating the social return to transport infrastructure: A price-difference approach applied to a quasi-experiment," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 669-683.
    7. Yu Qin, 2016. "China's Transport Infrastructure Investment: Past, Present, and Future," Asian Economic Policy Review, Japan Center for Economic Research, vol. 11(2), pages 199-217, July.
    8. Xuechao Sui & Xianhui Geng, 2021. "Continuous usage intention to e-transaction cards in wholesale markets of agriproducts: empirical evidence from China," Future Business Journal, Springer, vol. 7(1), pages 1-13, December.
    9. Qing Zhang & Juan Li & Tiaojun Xiao, 2022. "Contract design for technology sharing between two farmers," Annals of Operations Research, Springer, vol. 314(2), pages 677-707, July.
    10. Li, Zhigang & Wu, Mingqin & Chen, Bin R., 2017. "Is road infrastructure investment in China excessive? Evidence from productivity of firms," Regional Science and Urban Economics, Elsevier, vol. 65(C), pages 116-126.
    11. Robert Holzmann & Richard Hinz & David Tuesta, 2012. "Early Lessons from Country Experience with Matching Contribution Schemes for Pensions," Working Papers 1231, BBVA Bank, Economic Research Department.
    12. Ma, Kai & Zhao, Lei, 2024. "The impact of new energy transportation means on China's food import," Research in Transportation Economics, Elsevier, vol. 103(C).
    13. Steffen, Christoph & Yu, Xiaohua, 2018. "Transaction Costs and Food Prices in Rural Kenya," Department of Agricultural and Rural Development (DARE) Discussion Papers 274537, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).
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    More about this item

    Keywords

    Transport costs; China; Agricultural traders; Infrastructure;
    All these keywords.

    JEL classification:

    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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