Road Capacity, Domestic Trade and Regional Outcomes

What is the impact on intranational trade and regional economic outcomes when the quality and lane capacity of an existing paved road network is expanded significantly? This paper investigates this question for the case of Turkey, which undertook a...

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Main Authors:	Cosar, A. Kerem, Demir, Banu, Ghose, Devaki, Young, Nathaniel
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2021
Subjects:	ROAD INFRASTRUCTURE TRANSPORT INFRASTRUCTURE TRADE LOGISTICS TRADE
Online Access:	http://documents.worldbank.org/curated/undefined/629521631537099144/Road-Capacity-Domestic-Trade-and-Regional-Outcomes http://hdl.handle.net/10986/36280

id	okr-10986-36280
recordtype	oai_dc
spelling	okr-10986-362802021-09-18T05:10:34Z Road Capacity, Domestic Trade and Regional Outcomes Cosar, A. Kerem Demir, Banu Ghose, Devaki Young, Nathaniel ROAD INFRASTRUCTURE TRANSPORT INFRASTRUCTURE TRADE LOGISTICS TRADE What is the impact on intranational trade and regional economic outcomes when the quality and lane capacity of an existing paved road network is expanded significantly? This paper investigates this question for the case of Turkey, which undertook a large-scale public investment in roads during the 2000s. Using spatially disaggregated data on road upgrades and domestic transactions, the paper estimates a large positive impact of reduced travel times on trade as well as local manufacturing employment and wages. A quantitative exercise using a workhorse model of spatial equilibrium implies heterogeneous effects across locations, with aggregate real income gains reaching 2–3 percent in the long run. Reductions in travel times increased the local employment-to-population ratio but had no effect on local population. The model is extended by endogenizing the labor supply decision to capture this finding. The model-implied elasticity of employment rates to travel time reductions captures about one-third of the empirical elasticity. 2021-09-17T17:42:27Z 2021-09-17T17:42:27Z 2021-09 Working Paper http://documents.worldbank.org/curated/undefined/629521631537099144/Road-Capacity-Domestic-Trade-and-Regional-Outcomes http://hdl.handle.net/10986/36280 English Policy Research Working Paper;No. 9772 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ROAD INFRASTRUCTURE TRANSPORT INFRASTRUCTURE TRADE LOGISTICS TRADE
spellingShingle	ROAD INFRASTRUCTURE TRANSPORT INFRASTRUCTURE TRADE LOGISTICS TRADE Cosar, A. Kerem Demir, Banu Ghose, Devaki Young, Nathaniel Road Capacity, Domestic Trade and Regional Outcomes
relation	Policy Research Working Paper;No. 9772
description	What is the impact on intranational trade and regional economic outcomes when the quality and lane capacity of an existing paved road network is expanded significantly? This paper investigates this question for the case of Turkey, which undertook a large-scale public investment in roads during the 2000s. Using spatially disaggregated data on road upgrades and domestic transactions, the paper estimates a large positive impact of reduced travel times on trade as well as local manufacturing employment and wages. A quantitative exercise using a workhorse model of spatial equilibrium implies heterogeneous effects across locations, with aggregate real income gains reaching 2–3 percent in the long run. Reductions in travel times increased the local employment-to-population ratio but had no effect on local population. The model is extended by endogenizing the labor supply decision to capture this finding. The model-implied elasticity of employment rates to travel time reductions captures about one-third of the empirical elasticity.
format	Working Paper
author	Cosar, A. Kerem Demir, Banu Ghose, Devaki Young, Nathaniel
author_facet	Cosar, A. Kerem Demir, Banu Ghose, Devaki Young, Nathaniel
author_sort	Cosar, A. Kerem
title	Road Capacity, Domestic Trade and Regional Outcomes
title_short	Road Capacity, Domestic Trade and Regional Outcomes
title_full	Road Capacity, Domestic Trade and Regional Outcomes
title_fullStr	Road Capacity, Domestic Trade and Regional Outcomes
title_full_unstemmed	Road Capacity, Domestic Trade and Regional Outcomes
title_sort	road capacity, domestic trade and regional outcomes
publisher	World Bank, Washington, DC
publishDate	2021
url	http://documents.worldbank.org/curated/undefined/629521631537099144/Road-Capacity-Domestic-Trade-and-Regional-Outcomes http://hdl.handle.net/10986/36280
_version_	1764484925428334592

Road Capacity, Domestic Trade and Regional Outcomes

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