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The World Is Not Yet Flat: Transport Costs Matter!

Author

Listed:
  • Kristian Behrens

    (Université du Québec à Montréal, National Research University Higher School of Economics, CIRPÉE, and CEPR)

  • W. Mark Brown

    (Statistics Canada)

  • Théophile Bougna

    (Université du Québec à Montréal and World Bank)

Abstract

Using microlevel commodity flow data and microgeographic plant-level data, we construct industry-specific ad valorem trucking rate series and measures of geographic concentration to provide evidence on the relationship between transport costs and agglomeration. We find that low-transport-cost industries display significantly more geographic concentration in the cross-sectional dimension and that falling transport costs agglomerate industries in the panel dimension. The effects are large: the fall in trucking rates between 1992 and 2008 implied a 20% increase in geographic concentration on average, all else equal.

Suggested Citation

  • Kristian Behrens & W. Mark Brown & Théophile Bougna, 2018. "The World Is Not Yet Flat: Transport Costs Matter!," The Review of Economics and Statistics, MIT Press, vol. 100(4), pages 712-724, October.
    • Handle: RePEc:tpr:restat:v:100:y:2018:i:4:p:712-724
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    3. Arsène Aurelien NJAMEN KENGDO & Luc NEMBOT NDEFFO & Désiré AVOM, 2020. "The Effect of Foreign Debt on Economic Growth in Sub-Saharan African Sub-Regions," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 109-114.
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    5. Kristian Behrens, 2016. "Agglomeration and clusters: Tools and insights from coagglomeration patterns," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(4), pages 1293-1339, November.
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    7. Lenaerts, Bert & Allroggen, Florian & Malina, Robert, 2021. "The economic impact of aviation: A review on the role of market access," Journal of Air Transport Management, Elsevier, vol. 91(C).
    8. Robby K. Bemrose & W. Mark Brown & Jesse Tweedle, 2020. "Going the distance: Estimating the effect of provincial borders on trade when geography (and everything else) matters," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 1098-1131, August.
    9. Armando J. Garcia Pires & José Pedro Pontes, 2021. "(De)Industrialization, Technology and Transportation," Open Economies Review, Springer, vol. 32(3), pages 527-538, July.
    10. Alam, Muneeza & Herrera Dappe, Matías & Melecky, Martin & Goldblatt, Ran, 2022. "Wider economic benefits of transport corridors: Evidence from international development organizations," Journal of Development Economics, Elsevier, vol. 158(C).
    11. Behrens, Kristian & Sharunova, Vera, 2015. "Inter- and intra-firm linkages: Evidence from microgeographic location patterns," CEPR Discussion Papers 10921, C.E.P.R. Discussion Papers.
    12. Edilberto Tiago de Almeida & Raul da Mota Silveira Neto & Roberta de Moraes Rocha, 2022. "Manufacturing location patterns in Brazil," Papers in Regional Science, Wiley Blackwell, vol. 101(4), pages 839-873, August.
    13. Cosar,Ahmet Kerem, 2022. "Overland Transport Costs : A Review," Policy Research Working Paper Series 10156, The World Bank.
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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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