IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v118y2018icp627-647.html
   My bibliography  Save this article

The impact of railway reform on corporate export: The case of China

Author

Listed:
  • Wang, Cong
  • Yang, Hangjun
  • Yuan, Hang

Abstract

This study used monthly datasets over the 2004–2006 period collected from the General Administration of Customs, to analyze the reform of the Ministry of Railways (MOR) as an exogenous shock. The difference-in-differences method was applied to investigate the short-term impact of the MOR’s reform on rail exports from China and its underlying mechanisms. The findings suggested that within a short period after the reform, Chinese rail export declined by 10.94%. Moreover, we found that the reform caused marked decreases in the number of export firms and the price of export goods by rail. The near-monopolistic market structure of the Chinese rail transport industry would not change in the short term, and the overhaul of the governance structure of the MOR would induce noticeable trade effects. In addition, the mechanisms underlying the influence of the MOR’s reform followed on from the monopolistic nature of the industry and the extra market transaction costs associated with stringent government-pricing regulations. Accordingly, the Chinese rail transport sector should be further reformed by promoting its marketization and relaxing government-pricing regulations.

Suggested Citation

  • Wang, Cong & Yang, Hangjun & Yuan, Hang, 2018. "The impact of railway reform on corporate export: The case of China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 627-647.
    • Handle: RePEc:eee:transa:v:118:y:2018:i:c:p:627-647
    DOI: 10.1016/j.tra.2018.10.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856418303616
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2018.10.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Volpe Martincus, Christian & Blyde, Juan, 2013. "Shaky roads and trembling exports: Assessing the trade effects of domestic infrastructure using a natural experiment," Journal of International Economics, Elsevier, vol. 90(1), pages 148-161.
    2. Fumitoshi Mizutani & Shuji Uranishi, 2013. "Does vertical separation reduce cost? An empirical analysis of the rail industry in European and East Asian OECD Countries," Journal of Regulatory Economics, Springer, vol. 43(1), pages 31-59, January.
    3. Lu, Yi & Tao, Zhigang & Zhang, Yan, 2013. "How do exporters respond to antidumping investigations?," Journal of International Economics, Elsevier, vol. 91(2), pages 290-300.
    4. A. Kerem Co?ar & Pablo D. Fajgelbaum, 2016. "Internal Geography, International Trade, and Regional Specialization," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 24-56, February.
    5. Francois, Joseph & Manchin, Miriam, 2013. "Institutions, Infrastructure, and Trade," World Development, Elsevier, vol. 46(C), pages 165-175.
    6. Dominique Bouf & Rong T. Zhang, 2005. "How Can Competition be Introduced into Chinese Railways?," Post-Print halshs-00067797, HAL.
    7. Christian Broda & David E. Weinstein, 2006. "Globalization and the Gains From Variety," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 541-585.
    8. Gilles Duranton & Peter M. Morrow & Matthew A. Turner, 2014. "Roads and Trade: Evidence from the US," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(2), pages 681-724.
    9. David L. Hummels & Georg Schaur, 2013. "Time as a Trade Barrier," American Economic Review, American Economic Association, vol. 103(7), pages 2935-2959, December.
    10. Harrigan, James & Ma, Xiangjun & Shlychkov, Victor, 2015. "Export prices of U.S. firms," Journal of International Economics, Elsevier, vol. 97(1), pages 100-111.
    11. Rong, Zhang & Bouf, Dominique, 2005. "How can competition be introduced into Chinese railways?," Transport Policy, Elsevier, vol. 12(4), pages 345-352, July.
    12. Laurino, Antonio & Ramella, Francesco & Beria, Paolo, 2015. "The economic regulation of railway networks: A worldwide survey," Transportation Research Part A: Policy and Practice, Elsevier, vol. 77(C), pages 202-212.
    13. Jian >Hong Wu & Chris Nash, 2000. "Railway reform in China," Transport Reviews, Taylor & Francis Journals, vol. 20(1), pages 25-48, January.
    14. Bonfatti, Roberto & Poelhekke, Steven, 2017. "From mine to coast: Transport infrastructure and the direction of trade in developing countries," Journal of Development Economics, Elsevier, vol. 127(C), pages 91-108.
    15. Bruce A. Blonigen & Jee-Hyeong Park, 2004. "Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence," American Economic Review, American Economic Association, vol. 94(1), pages 134-154, March.
    16. Caves, Douglas W & Christensen, Laurits R & Swanson, Joseph A, 1981. "Productivity Growth, Scale Economies, and Capacity Utilization in U.S. Railroads, 1955-74," American Economic Review, American Economic Association, vol. 71(5), pages 994-1002, December.
    17. Russell Pittman, 2004. "Chinese Railway Reform and Competition: Lessons from the Experience in Other Countries," Journal of Transport Economics and Policy, University of Bath, vol. 38(2), pages 309-332, May.
    18. Carolyn L. Evans & James Harrigan, 2005. "Distance, Time, and Specialization: Lean Retailing in General Equilibrium," American Economic Review, American Economic Association, vol. 95(1), pages 292-313, March.
    19. Natalia Ramondo & Andrés Rodríguez-Clare & Milagro Saborío-Rodríguez, 2016. "Trade, Domestic Frictions, and Scale Effects," American Economic Review, American Economic Association, vol. 106(10), pages 3159-3184, October.
    20. Jensen, Arne & Stelling, Petra, 2007. "Economic impacts of Swedish railway deregulation: A longitudinal study," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(5), pages 516-534, September.
    21. Coşar, A. Kerem & Demir, Banu, 2016. "Domestic road infrastructure and international trade: Evidence from Turkey," Journal of Development Economics, Elsevier, vol. 118(C), pages 232-244.
    22. Chris Nash & Jan-Eric Nilsson & Heike Link, 2013. "Comparing Three Models for Introduction of Competition into Railways," Journal of Transport Economics and Policy, University of Bath, vol. 47(2), pages 191-206, May.
    23. Matthieu Crozet & Emmanuel Milet, 2017. "Should everybody be in services? The effect of servitization on manufacturing firm performance," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 820-841, December.
    24. Mette Asmild & Torben Holvad & Jens Hougaard & Dorte Kronborg, 2009. "Railway reforms: do they influence operating efficiency?," Transportation, Springer, vol. 36(5), pages 617-638, September.
    25. Volpe Martincus, Christian & Carballo, Jerónimo & Garcia, Pablo M. & Graziano, Alejandro, 2014. "How do transport costs affect firms’ exports? Evidence from a vanishing bridge," Economics Letters, Elsevier, vol. 123(2), pages 149-153.
    26. Volpe Martincus, Christian & Carballo, Jerónimo & Cusolito, Ana, 2017. "Roads, exports and employment: Evidence from a developing country," Journal of Development Economics, Elsevier, vol. 125(C), pages 21-39.
    27. John D. Bitzan, 2003. "Railroad Costs and Competition: The Implications of Introducing Competition to Railroad Networks," Journal of Transport Economics and Policy, University of Bath, vol. 37(2), pages 201-225, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qipeng Sun & Xiu Wang & Fei Ma & Yanhu Han & Qianqian Cheng, 2019. "Synergetic Effect and Spatial-Temporal Evolution of Railway Transportation in Sustainable Development of Trade: An Empirical Study Based on the Belt and Road," Sustainability, MDPI, vol. 11(6), pages 1-22, March.
    2. Özer, Mustafa & Canbay, Şerif & Kırca, Mustafa, 2021. "The impact of container transport on economic growth in Turkey: An ARDL bounds testing approach," Research in Transportation Economics, Elsevier, vol. 88(C).
    3. Li, Hongchang & Yu, Kemei & Wang, Kun & Zhang, Anming, 2019. "Market power and its determinants in the Chinese railway industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 120(C), pages 261-276.
    4. Gong, Daqing & Ren, Long & Liu, Shifeng & Yan, Xiaojie, 2022. "Compensation and coordination mechanisms on China's railway public transportation service," Transport Policy, Elsevier, vol. 115(C), pages 101-112.
    5. Lu, Juan & Li, He, 2022. "Can high-speed rail improve enterprise capacity utilization? A perspective of supply side and demand side," Transport Policy, Elsevier, vol. 115(C), pages 152-163.
    6. Li, Hui & Dong, Xiucheng & Jiang, Qingzhe & Dong, Kangyin, 2021. "Policy analysis for high-speed rail in China: Evolution, evaluation, and expectation," Transport Policy, Elsevier, vol. 106(C), pages 37-53.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Coşar, A. Kerem & Demir, Banu, 2016. "Domestic road infrastructure and international trade: Evidence from Turkey," Journal of Development Economics, Elsevier, vol. 118(C), pages 232-244.
    2. Sheila Kaminchia, 2020. "Effect of transit road quality on trade costs in East Africa," African Development Review, African Development Bank, vol. 32(3), pages 316-326, September.
    3. Cui, Shana & Pittman, Russell & Zhao, Jian, 2018. "Restructuring the Chinese Freight Railway: Two Scenarios," MPRA Paper 88407, University Library of Munich, Germany.
    4. Pablo D. Fajgelbaum & Edouard Schaal, 2020. "Optimal Transport Networks in Spatial Equilibrium," Econometrica, Econometric Society, vol. 88(4), pages 1411-1452, July.
    5. Hayakawa, Kazunobu & Keola, Souknilanh & Sudsawasd, Sasatra & Yamanouchi, Kenta, 2022. "Impacts of an international bridge on households: Evidence from Thailand," Journal of Asian Economics, Elsevier, vol. 83(C).
    6. Fiorini, Matteo & Sanfilippo, Marco & Sundaram, Asha, 2021. "Trade liberalization, roads and firm productivity," Journal of Development Economics, Elsevier, vol. 153(C).
    7. Jaimovich, Esteban, 2019. "Roadways, input sourcing, and patterns of specialization," European Economic Review, Elsevier, vol. 120(C).
    8. Gao, Longfei & Tang, Yao, 2024. "Domestic Transportation Infrastructure and Export Performance of Multiproduct Firms: The Role of Domestic Intermediate Inputs," MPRA Paper 121155, University Library of Munich, Germany.
    9. Xu, Hangtian, 2016. "Domestic railroad infrastructure and exports: Evidence from the Silk Route," China Economic Review, Elsevier, vol. 41(C), pages 129-147.
    10. Jason Query, 2020. "Differing trade elasticities for intra‐ and international distances: A gravity approach," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 913-929, August.
    11. Wessel, Jan, 2019. "Evaluating the transport-mode-specific trade effects of different transport infrastructure types," Transport Policy, Elsevier, vol. 78(C), pages 42-57.
    12. Gáfaro, Margarita & Pellegrina, Heitor S., 2022. "Trade, farmers’ heterogeneity, and agricultural productivity: Evidence from Colombia," Journal of International Economics, Elsevier, vol. 137(C).
    13. Mizutani, Fumitoshi, 2020. "A comparison of vertical structural types in the railway industry: A simple mathematical explanation model," Research in Transportation Economics, Elsevier, vol. 81(C).
    14. Matthias Helble & Ben Shepherd & John S. Wilson, 2009. "Transparency and Regional Integration in the Asia Pacific," The World Economy, Wiley Blackwell, vol. 32(3), pages 479-508, March.
    15. Huang, Wencheng & Zhang, Yue & Shuai, Bin & Xu, Minhao & Xiao, Wei & Zhang, Rui & Xu, Yifei, 2019. "China railway industry reform evolution approach: Based on the Vertical Separation Model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 130(C), pages 546-556.
    16. Marcelo OLARREAGA, 2016. "Trade, Infrastructure and Development," Working Papers P177, FERDI.
    17. Faheem Ur Rehman & Yibing Ding & Abul Ala Noman & Muhammad Asif Khan, 2020. "The Nexus Between Infrastructure and Export: An Empirical Evidence from Pakistan," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 12(2), pages 141-157, May.
    18. Yu, Kemei & Wu, Jianhong & Wang, Kun & Zhang, Anming & Zheng, Shiyuan & Wang, Yixiao & Li, Hongchang, 2023. "Restructuring Chinese railways from a cost-efficient perspective—A hedonic cost function analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 177(C).
    19. Baniya, Suprabha & Murray, Siobhan & Rocha, Nadia & Ruta, Michele, 2018. "Trade Effects of the New Silk Road," Conference papers 333010, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    20. Dan Liu & Liugang Sheng & Miaojie Yu, 2023. "Highways and firms' exports: Evidence from China," Review of International Economics, Wiley Blackwell, vol. 31(2), pages 413-443, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:118:y:2018:i:c:p:627-647. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.