Template-type: ReDif-Paper 1.0
Author-Name: Mau, Karsten
Author-workplace-name: RS: GSBE MORSE, RS: GSBE FSD, RS: GSBE other - not theme-related research, Macro, International & Labour Economics
Author-Name: Xu, Mingzhi
Author-Name: Zheng, Yawen
Title: International transport infrastructure and regional economic development
Abstract: We evaluate how access to international transport infrastructure promotes trade and<br/>economic development. Exploiting the gradual unfolding of transcontinental rail freight<br/>connections between China and Europe, our empirical findings indicate increasing exports<br/>from connected cities, with positive spillovers to other transport modes, neighboring<br/>cities, and indicators of economic activity. Not all products and cities are equally<br/>responsive to new rail export opportunities. We set up a multi-sector heterogeneous<br/>firms model with a rich specification of trade costs, in which firms optimize trade costs<br/>by choosing alternative transportation modes and routes. Leveraging a unique data<br/>set on trade flows between Chinese cities, we calibrate our model to discuss local welfare<br/>effects, relying on a sufficient statistic that quantifies changes in city-level trade<br/>costs. We also highlight significant spatial distributional effects of trade infrastructure<br/>development.
Classification-JEL: f14,f15,r11,r41
Series: GSBE Research Memoranda
Creation-Date: 20250116
Number: 001
File-URL: https://cris.maastrichtuniversity.nl/ws/files/236380861/RM25001.pdf
File-Format: application/pdf
File-Size: 8214575
Handle: Repec:unm:umagsb:2025001
DOI: 10.26481/umagsb.2025001