The Trade Reducing Effects of Market Power in International Shipping

Hummels, David; Lugovskyy, Volodymyr; Skiba, Alexandre

doi:10.3386/w12914

Cited by 80 publications

(99 citation statements)

References 8 publications

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“…Given their importance, many studies have been devoted to accurately defining and measuring transport costs and their determinants. Considering different transportation modes and freight cargo, we can highlight several studies measuring transportation costs: Combes and Lafourcade (2005) for the case of road transportation, Ivaldi and McCullough (2007) in train haulage, Hummels et al (2007) in air delivery, and Tolofari (1986) and Hummels (2007) in maritime shipping. From the point of view of a static cross-section definition, the cost engineering and accounting methodology followed by these studies is thoughtfully and competently executed, enhancing the customary and simpler unit value and value of time indices into a comprehensive generalised transport cost measure.…”

Section: Introductionmentioning

confidence: 99%

Generalized transport costs and index numbers: A geographical analysis of economic and infrastructure fundamentals

Zofío

Condeço-Melhorado

Maroto-Sánchez

et al. 2014

Transportation Research Part A: Policy and Practice

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We rely on the economic theory approach to index numbers to improve the existing definitions and decompositions of variations in generalized transport costs (GTCs). As a value index, we decompose GTCs into price and quantity indices associated to economic-market-costs and infrastructure variables-distance and time within a network. The methodology allows the accurate identification of the sources of GTCs decline. We illustrate it for the case of road freight transportation in Spain between 1980 and 2007 and at a highly detailed geographical level. Average GTCs weighted by trade flows have decreased by 16.3%, with infrastructure driving that reduction. We find large territorial disparities in GTCs, but also significant geographical clusters where the market and network indices show spatial association.

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Section: Introductionmentioning

confidence: 99%

Generalized transport costs and index numbers: A geographical analysis of economic and infrastructure fundamentals

Zofío

Condeço-Melhorado

Maroto-Sánchez

et al. 2014

Transportation Research Part A: Policy and Practice

View full text Add to dashboard Cite

show abstract

“…However, the contract price with forwarders includes not only shipping freight but also port handling and terminal handling charges, in addition to inland transport costs and warehouse costs (Source: the interviews for Japan Federation of Costal Shipping Associations and the Busan Port Authority (BPA)). In the US, firm import transaction-level shipment charges are available in the US Census: Imports of Merchandise (see applications in Hummels et al, 2009); however, firm-level shipment charges (maritime shipping) are not available in Japan. 14 Although micro-level container freight rate data are not available in Japan, price advantage in Busan port could be partially observed.…”

Section: 2 Datamentioning

confidence: 99%

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

Itoh

2018

Journal of Urban Economics

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By exploiting the 1995 Hanshin earthquake, which occurred in Japan, as an exogenous shock to the container shipping industry of northeastern Asia, this study provides an empirical relevance of the role of transport density economies in shaping the transport geography. The Hanshin earthquake caused severe damage to the Kobe port. Consequently, its container throughput was largely diverted to the nearby Busan port, which scaled up in this windfall. Focusing on the long-term growth of major port areas in northeastern Asia, we find that extensive diversions of container traffic occurred after the earthquake from Tokyo and Yokohama ports to Busan port, although container shipping operations in Tokyo and Yokohama ports were not directly affected by the earthquake. We interpret the economies of transport density benefitting Busan as the underlying mechanism; increased transport density allows Busan port to further enlarge its hinterlands and reshape the transport geography. We also find that the unintended diversions of container shipping lead to a structural change of manufacturing pattern in related regions.

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“…In addition of the endogeneity bias, the model 6 has the following characteristics: (1) it is the study of the impact of aggregate trade cost on comparative advantage or export structure, which is different from some literature that only study the effect of one specific trade cost on trade flows, such as information barriers (Felbermayr et al 2009;Rauch and Trindabe 2002), geographical area (Limao and Venable 1999), Monetary Union (Rose and Wincoop 2001), monopoly power of cartel in transportation enterprises (Hummels et al 2009). Although the analysis is instructive, there is no explanation for the proportion of trade cost in the full significance, which is due to the high requirement for data.…”

Section: Econometric Empirical Analysesmentioning

confidence: 99%

Measuring aggregate trade costs and its empirical effects on manufacturing export composition in China

Liang

2017

China Financ. and Econ. Rev.

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Background: This paper measures the aggregate trade costs from 2000 to 2013, and dicusses the impact of China's aggregate trade costs on comparative advantages and export share of 17 two-digit ISIC manufacturing industries. Methods: This paper takes China's vertical specialization reality into account and establishes the panel data model which relates the aggregate trade costs with the export shares. Results: We find that China's aggregate trade costs are declining, but it is still 1/3 higher than that of developed countries of 10 years ago; bilateral trade costs between China and some countries even risen instead; aggregate trade costs are the determinants, not only of "global" and "local" comparative advantages, but also of export share of China's manufacturing products, and its effect is stronger in industries with higher trade cost intensity. Conclusions: We should consider the product composition on trade cost intensity and domestic value-added reseller (DVAR), and reduce trade costs in order to promote the export of products with higher domestic value-added rate, and to realize the substantial transformation of foreign trade growth mode.

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The Trade Reducing Effects of Market Power in International Shipping

Abstract: for helpful comments. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.

Cited by 80 publications

References 8 publications

Generalized transport costs and index numbers: A geographical analysis of economic and infrastructure fundamentals

Generalized transport costs and index numbers: A geographical analysis of economic and infrastructure fundamentals

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

Measuring aggregate trade costs and its empirical effects on manufacturing export composition in China

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