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All aboard: The aggregate effects of port development

Author

Listed:
  • César Ducruet
  • Réka Juhász
  • David Krisztián Nagy
  • Claudia Steinwender
Abstract
Transport infrastructure facilitates the fast flow of goods and people across space, but it also occupies extensive amounts of land. This may drive up land rents and crowd out other economic activity. Using the introduction of containerized shipping - a relatively land-intensive technology -, we find an important role for this crowding-out effect. At the local level, we find that seaport development increases city population by making a city more attractive, but this well-known market access effect is offset by the crowding-out mechanism. At the aggregate level, while we estimate overall welfare gains from containerization, our quantitative model featuring endogenous port development also implies i) sizeable welfare costs associated with the increased land-usage of ports, and ii) sizeable gains from cities' endogenous specialization across port- and non-port activities. These mechanisms are particularly important for targeted port development, which we illustrate by evaluating the effects of the Maritime Silk Road.

Suggested Citation

  • César Ducruet & Réka Juhász & David Krisztián Nagy & Claudia Steinwender, 2019. "All aboard: The aggregate effects of port development," Economics Working Papers 1708, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2022.
    • Handle: RePEc:upf:upfgen:1708
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    References listed on IDEAS

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    3. Hirte, Georg & Lessmann, Christian & Seidel, André, 2020. "International trade, geographic heterogeneity and interregional inequality," European Economic Review, Elsevier, vol. 127(C).

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    More about this item

    Keywords

    quantitative economic geography; international trade; transport infrastructure;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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