Roads and Trade: Evidence from the US

Abstract

We estimate the effect of interstate highways on the level and composition of trade for US cities. Highways within cities have a large effect on the weight of city exports with an elasticity of approximately 0.5. We find little effect of highways on the total value of exports. Consistent with this, we find that cities with more highways specialize in sectors producing heavy goods. University of TorontoThis draft: 21 July 2011 Abstract: We estimate the effects of interstate highways on the level and composition of trade for us cities. Highways within cities have a large effect on the weight of city exports with an elasticity of approximately 0.5. There is no discernible effect of highways on the total value of exports. Consistent with this, we find that cities with more highways specialize in sectors producing heavy goods.

Density economies and transport geography: Evidence from the container shipping industry

“…We find in the study area that after the earthquake, regions diverting their container cargoes to Busan port expanded the scale on container trade tonnage volumes, while leaving the trade values (taking the value term of manufacturing input and output as proxies) largely unchanged, compared with the selected control regions. We interpret these results as more efficient shipping systems (through the expanded Busan port) shifting economic activity in related regions toward the production of heavy goods (high weight per dollar), which is consistent with the findings of Duranton et al (2014). Duranton et al (2014) find that a city's stock of highways in the US is positively associated with its weight of exports, but does not affect the value of exports; cities with more highways specialize in sectors producing heavy goods (high weight per dollar).…”

“…We interpret these results as more efficient shipping systems (through the expanded Busan port) shifting economic activity in related regions toward the production of heavy goods (high weight per dollar), which is consistent with the findings of Duranton et al (2014). Duranton et al (2014) find that a city's stock of highways in the US is positively associated with its weight of exports, but does not affect the value of exports; cities with more highways specialize in sectors producing heavy goods (high weight per dollar).…”

“…We find no significant evidence in the impacts of Hanshin earthquake and Busan port expansion on the value terms of manufacturing in Group 2, which is different from the results measured by tonnage volume of container traffic. This result is consistent with Duranton et al (2014), who find more highways will lead to the cities in the US specializing in sectors producing heavy goods, despite the insignificant effect of highways on the total value of exports. With better accessibility to international markets, Group 2 may specialize in manufacturing sectors producing heavy goods but low value/weight rate.…”

“…22 This implies that 22 For maritime shipping (not only container shipping), the tariff of heavy goods will be measured by weight volume, while cubic 22 the port choice diversion of shippers in Group 2 of northern Japan may alter the patterns of its comparative advantage and lead to greater specialization in the production and trade of heavier goods (see a more detailed discussion in Duranton et al (2014): Comparative Static 6 and related empirical tests (pp. 696 & 713-716)).…”

“…For the latter, it may be caused by other factors, rather than the mechanism proposed by Duranton et al, 2014. For example, manufacturing products of Group 2 become popular in overseas markets during the post-Hanshin volume is suitable for light goods.…”