Pricing and investment of cross-border transport infrastructure

Se-il Mun and Shintaro Nakagawa

Regional Science and Urban Economics, 2010, vol. 40, issue 4, 228-240

Abstract: We develop a simple two-country model of international trade in which the transportation cost between countries is endogenously determined by pricing and investment decisions of cross-border transport infrastructure. We evaluate alternative regimes of pricing and investment, i.e., free access (e.g., public road), pricing by two governments, and private operation. We also examine the effect of integrating operation. It is shown that investment rule in free access regime is inefficient. On the other hand, the investment rule is efficient if infrastructure charge is levied either by the government or by the private operators. We obtain the welfare ranking of alternative regimes under specific functional form, show how the welfare results depend on pricing policies.

Keywords: Infrastructure; Transportation; Trade; Pricing; Capacity; choice (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0166-0462(10)00017-7
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Pricing and investment of cross-border transport infrastructure (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:40:y:2010:i:4:p:228-240

Access Statistics for this article

Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou

More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().