Trade, Infrastructure, and Roadways in Europe and Central Asia: New Empirical Evidence

Ben Shepherd and John Wilson

Journal of Economic Integration, 2007, vol. 22, 723-747

Abstract:

Infrastructure quality is a crucial determinant of trade. To assess the importance of regional infrastructure externalities, we use detailed overland transit information from an original road network database. Gravity model simulations suggest that an ambitious but feasible road upgrade could increase trade by 50% over baseline, exceeding the expected gains from tariff reductions or trade facilitation programs of comparable scope. Cross-country spillovers due to overland transit are very large: total intraregional trade could be increased by 30% by upgrading roads in just three countries—Albania, Hungary and Romania. These results bolster the case for regional coordination of infrastructure investments.

Keywords: International Trade; Europe and Central Asia; Road Transport; Trade Facilitation; Gravity Model (search for similar items in EconPapers)
JEL-codes: F13 F15 H54 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0413

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