Backfiring with Backhaul Problems: Trade and Industrial Policies with Endogenous Transport Costs

Jota Ishikawa, 城太 石川 and Nori Tarui

No HIAS-E-57, Discussion paper series from Hitotsubashi Institute for Advanced Study, Hitotsubashi University

Abstract: Trade barriers due to transport costs are as large as those due to tariffs. This paper incorporates the transport sector into a standard model of international trade and studies the effects of trade and industrial policies. Transport firms need to commit to a shipping capacity sufficient for a round trip, with a possible imbalance of shipping volumes in two directions. This imbalance is known as the “backhaul problem.” As transport firms attempt to avoid this problem, a tariff in one sector may affect other independent import and/or export sectors. In particular, domestic tariffs may backfire: domestic exports may also decrease, harming domestic export sectors and the domestic economy. This finding contributes to the literature on how import liberalization may generate a positive effect on the liberalizing country’s exports by identifying a new channel through endogenous changes in transport costs given the backhaul problem.

Keywords: Transport sector; transport cost; backhaul problems; international shipping; tariffs (search for similar items in EconPapers)
JEL-codes: F12 F13 R40 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2017-10
New Economics Papers: this item is included in nep-int and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/28852/070_hiasDP-E-57.pdf

Related works:
Working Paper: Backfiring with Backhaul Problems: Trade and industrial policies with endogenous transport costs (2016)
Working Paper: Backfiring with backhaul problems: Trade and Industrial Policies with Endogenous Transport Costs (2015)
Working Paper: Backfiring with backhaul problems: Trade and Industrial Policies with Endogenous Transport Costs (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hiasdp:hias-e-57

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