How infrastructure shapes comparative advantage

Luis Baldomero Quintana

No 1920, Research Department working papers from CAF Development Bank Of Latinamerica

Abstract: This paper provides evidence that domestic trade costs are a source of comparative advantage. First, I build an international trade and internal geography model with transportation features and input-output linkages. Then, I simulate how a large road project, Ruta del Sol, impacts the comparative advantage of Colombia. This road improves access to global markets for heterogeneous regions. My results show that the project shifts the comparative advantage of Colombia towards manufacturing. Industry linkages reinforce this effect. Hence, I confirm that a country’s comparative advantage is shaped by domestic trade costs, in addition to classical determinants like endowments, technology, and institutions. Lastly, my results suggest that road infrastructure is key for the structural transformation of developing nations.

Keywords: Ciudades; Desarrollo urbano; Economía; Infraestructura; Investigación socioeconómica; Movilidad urbana; Sector público; Transporte (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-geo, nep-int and nep-ppm
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:dbl:dblwop:1920

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