Arbeitspapier

Endogenous transport costs in international trade

In this paper we claim that distance alone is a poor proxy for international transport costs in empirical studies. We model a manufacturing and a transport sector and let the level of manufacturing exports determine the demand for transport services. Above a particular trade level, transport service suppliers find it profit-maximizing to invest in an advanced transport technology, which lowers their marginal costs and as a consequence, equilibrium transport prices. Transport costs thus vary with two characteristics: with the distance between two locations and with the endogenous decision to invest in a more efficient technology which is driven, in turn, by the bilateral export level. A simulation exercise reveals that ignoring the effect of the investment decision on transport costs biases empirical results. The empirical estimations rely on newly collected transport price data from United Parcel Service (UPS). We apply an instrumental variable (IV) estimator to account for the endogeneity of the investment decision. Our results confirm that transport prices are influenced by both the distance and the level of exports between two countries. We find that trade partners with 10% more exports enjoy 0.8% lower transport prices.

Sprache
Englisch

Erschienen in
Series: IAW Diskussionspapiere ; No. 74

Klassifikation
Wirtschaft
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Economic Integration
Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
Thema
Distance
endogenous transport costs
Transportkosten
Außenwirtschaft
Exportindustrie
Verkehrsgewerbe
Investition
Wirtschaftliche Effizienz
Verkehrstarif
Theorie
Schätzung
OECD-Staaten

Ereignis
Geistige Schöpfung
(wer)
Kleinert, Jörn
Spies, Julia
Ereignis
Veröffentlichung
(wer)
Institut für Angewandte Wirtschaftsforschung (IAW)
(wo)
Tübingen
(wann)
2011

Handle
Letzte Aktualisierung
20.09.2024, 08:21 MESZ

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Kleinert, Jörn
  • Spies, Julia
  • Institut für Angewandte Wirtschaftsforschung (IAW)

Entstanden

  • 2011

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