Determinants of transport costs: Are they uniform across countries?

Hannah Schürenberg-Frosch

No 2012-54, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The author shows with pooled OLS estimations based on transport margins from international social accounting data that investments in improved road infrastructure have the potential to significantly reduce transport costs. However, this result can only be clearly confirmed for industrial countries and is of primary importance for production and transportation of agricultural goods. For developing and transition countries, in contrast, the author finds other determinants such as weather conditions to be more important in determining transport costs. A key variable, especially in these countries, is corruption. Very high corruption has the potential to prevent positive effects from road infrastructure on transport costs or to even reverse them. This paper contributes to the literature on infrastructure investment by introducing and applying an internationally comparable measure of transport costs which can be calculated for a large and growing number of countries. The author concludes that investments in transport infrastructure can have substantial positive effects especially on agricultural production and the efficient marketing of agricultural products but only if specific additional conditions are given.

Keywords: infrastructure; transport networks; transport costs; agriculture; public investment; development (search for similar items in EconPapers)
JEL-codes: O11 O18 R42 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-int, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201254

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