Internal Geography, International Trade, and Regional Specialization

Cosar, Kerem; Fajgelbaum, Pablo

doi:10.3386/w19697

Cited by 21 publications

(17 citation statements)

References 28 publications

(32 reference statements)

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“…As noted above, Atkin and Donaldson (2012) estimate large internal trade costs in Ethiopia and Nigeria. Cosar and Fajgelbaum (2013) develop a model in which these costs lead to regional specialization in export-oriented industries close to ports, and verify this prediction in China.…”

Section: Introductionmentioning

confidence: 76%

Domestic road infrastructure and international trade: Evidence from Turkey

Coşar

Demir

2016

Journal of Development Economics

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188

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractPoor domestic transportation infrastructure in developing countries is often cited as an important impediment for accessing international markets. Yet, evidence on how transportation infrastructure improvements affect the volume and composition of exports is scarce. Drawing on the large-scale public investment in expressways undertaken in Turkey during the 2000s, this paper contributes to our understanding of how internal trade costs affect regional exports and specialization. Two results emerge. First, we estimate that this road infrastructure project accounts for 15 percent of the export increase from interior regions, generating a 10-year discounted stream of additional export revenues that amount to between 9 and 14 percent of the value of the investment. Second, while the exports of all industries within a given region increase in response to improvements in connectivity to the international gateways of the country, the magnitude of this increase is larger the more time sensitive an industry is. Accordingly, we also observe an increase in the regional employment and revenue shares of such industries. Our results support the hypothesis that internal trade costs can be a determinant of international specialization and comparative advantage.JEL Codes: F14, R11, R41.

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Section: Introductionmentioning

confidence: 76%

Domestic road infrastructure and international trade: Evidence from Turkey

Coşar

Demir

2016

Journal of Development Economics

Self Cite

188

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“…First, this paper complements a recent literature that extends models of international trade to accommodate intra-national trade costs (see, for example, Ramondo, Rodriguez-Clare, andSaborio-Rodriguez (2012), Redding (2012), Du, Wei, and Xie (2013), Agnosteva, Anderson, and Yotov (2014), Fajgelbaum and Redding (2014), and Cosar and Fajgelbaum (2015)). The implications of these models depend crucially on the size of intra-national trade costs, and we provide a methodology for estimating such costs using spatial price gaps.…”

Section: Introductionmentioning

confidence: 80%

Who's Getting Globalized? The Size and Implications of Intra-national Trade Costs

Atkin

Donaldson

2015

150

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How large are the intra-national trade costs that separate consumers in remote locations of developing countries from global markets? What do those barriers imply for the intra-national incidence of the gains from falling international trade barriers? We develop a new methodology for answering these questions and apply it to newly collected CPI micro-data from Ethiopia and Nigeria (as well as to the US). In order to overcome three well-known challenges that arise when using price gaps to estimate trade costs, we: (i) work exclusively with a sample of goods that are identified at the barcode-level (to mitigate bias due to unobserved quality differences over space); (ii) collect novel data on the origin location of each product in our sample (to focus only on the pairs of locations that actually identify trade costs); and (iii) use estimates of cost pass-through to correct for mark-ups that potentially vary over space (to extract trade costs from price variation in an environment with potentially oligopolistic intermediaries). Without these corrections, we find that our estimates of the cost of distance would be biased downwards by a factor of approximately four. Our preferred estimates imply that the effect of log distance on trade costs within Ethiopia or Nigeria is four to five times larger than in the US. We also use our pass-through estimates to calculate the incidence of surplus increases due to falling world prices. We find that intermediaries capture the majority of the surplus, and that their share is even higher in distant locations, suggesting that remote consumers see only a small part of the gains from falling international trade barriers.

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“…The same rule applies to industries having revealed comparative advantages, which decide to establish close to international gates of transportation (Coşar & Fajgelbaum, 2016). The resulting pattern of regional specialisation may therefore be the effect of spatial agglomeration of economic entities .…”

Section: The Role Of Specialisation In the Export Success Of Polish Cmentioning

confidence: 98%