Artikel
Endogenous transport costs and international trade
In this paper, we model a manufacturing and a transport sector and use export volumes to determine the demand for transport services. If trade exceeds a particular level, transport service suppliers maximise profit by investing in an advanced transport technology, which lowers their marginal costs and reduces equilibrium transport prices. Transport costs thus vary according to two characteristics: the distance between two locations and the endogenous firm decision to invest in transportation. A simulation exercise reveals that ignoring the effect of the investment decision on transport costs biases empirical results. We apply this insight in our empirical estimations which rely on repeatedly collected transport price data from the United Parcel Service. We use an instrumental variable estimator to account for the endogeneity of the investment decision. Our estimation results confirm that transport prices are influenced by both the distance and the level of exports between two countries. We find that trading partners with 10% more exports enjoy on average 0.6% lower transport prices.
- Language
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Englisch
- Bibliographic citation
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Journal: The World Economy ; ISSN: 1467-9701 ; Volume: 46 ; Year: 2022 ; Issue: 3 ; Pages: 560-597 ; Hoboken, NJ: Wiley
- Classification
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Wirtschaft
- Subject
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distance
endogenous transport costs
OLS/Poisson estimation
- Event
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Geistige Schöpfung
- (who)
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Hafner, Kurt A.
Kleinert, Jörn
Spies, Julia
- Event
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Veröffentlichung
- (who)
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Wiley
- (where)
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Hoboken, NJ
- (when)
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2022
- DOI
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doi:10.1111/twec.13337
- Last update
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10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Hafner, Kurt A.
- Kleinert, Jörn
- Spies, Julia
- Wiley
Time of origin
- 2022
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CREDIT CONSTRAINTS, ENDOGENOUS INNOVATIONS, AND PRICE SETTING IN INTERNATIONAL TRADE
OPTIMAL PAYMENT CONTRACTS IN TRADE RELATIONSHIPS
Trade unions and corporate social responsibility
Reducing complexity and compliance costs: a simplification safe harbour for the global minimum tax
Beyond windfall gains: The redistribution of apprenticeship costs and vocational education of care workers
Pharmaceutical regulation under market integration through parallel trade
Cost uncertainty in an oligopoly with endogenous entry
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