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Investing in Port Infrastructure to Lower Trade Costs in East Asia

Author

Listed:
  • Abe , Kazutomo

    (Tokyo Denki University)

  • Wilson, John S.

    (The World Bank)

Abstract

We examine how port infrastructure affects trade and role of transport costs in driving exports and imports for East Asia. Existing studies use survey indexes to explain transport costs. These do not link investment in port infrastructure to transport costs. We include in our estimates a variable to represent the congestion of the ports to explain the transport costs. We find that the port congestion has significantly increased the transport costs from East Asia to the United States. Our analysis suggests that increase in port capacity by 10 percent could cut transport cost in East Asia by up to three percent. This translates into a 0.3 to 0.5 percent across-the-board tariff cut.

Suggested Citation

  • Abe , Kazutomo & Wilson, John S., 2011. "Investing in Port Infrastructure to Lower Trade Costs in East Asia," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 15(2), pages 3-32, June.
    • Handle: RePEc:ris:eaerev:0090
    DOI: 10.11644/KIEP.JEAI.2011.15.2.228
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    Cited by:

    1. Qiao Lei & Chris Bachmann, 2020. "Assessing the role of port efficiency as a determinant of maritime transport costs: evidence from Canada," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 22(4), pages 562-584, December.
    2. Lingyan Xu & Dandan Wang & Jianguo Du, 2021. "The Heterogeneous Influence of Infrastructure Construction on China’s Urban Green and Smart Development—The Threshold Effect of Urban Scale," Land, MDPI, vol. 10(10), pages 1-17, September.

    More about this item

    Keywords

    International Trade; Trade Costs; East Asia; ASEAN; China; Trade Facilitation; Infrastructure; Gravity Model;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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