Domestic road infrastructure and international trade: evidence from Turkey

Date
2016
Authors
Coşar, A. K.
Demir, B.
Editor(s)
Advisor
Supervisor
Co-Advisor
Co-Supervisor
Instructor
Source Title
Journal of Development Economics
Print ISSN
0304-3878
Electronic ISSN
1872-6089
Publisher
Elsevier
Volume
118
Issue
Pages
232 - 244
Language
English
Journal Title
Journal ISSN
Volume Title
Series
Abstract

Drawing on the large-scale public investment in roads undertaken in Turkey during the 2000s, this paper contributes to our understanding of how internal transportation infrastructure affects regional access to international markets. Using data on international trade of Turkish provinces and the change in the capacity of the roads connecting them to the international gateways of the country, we estimate the distance elasticity of trade associated with roads of varying capacity. Three key results emerge. First, the cost of an average shipment over a high-capacity expressway is about 70% lower than it is over single-lane roads. Second, the present value of a 10-year stream of trade flows generated by a one-dollar investment in road infrastructure ranges between $0.7 and $2. Third, the reduction in transportation costs is greater the more transportation-sensitive an industry is. To the extent that efficient logistics enable countries to take part in global supply chains and exploit their comparative advantages, our findings have important developmental implications. © 2015 Elsevier B.V.

Course
Other identifiers
Book Title
Citation
Published Version (Please cite this version)