AN APPLICATION OF AN INTEGRATED TRANSPORT NETWORK - MULTIREGIONAL CGE MODEL TO THE CALIBRATION OF SYNERGY EFFECTS OF HIGHWAY INVESTMENTS

Euijune Kim and Geoffrey Hewings

Economic Systems Research, 2009, vol. 21, issue 4, 377-397

Abstract: A transportation network-multiregional CGE model is applied to estimate the synergy effects of a set of highway projects on value added by region and industrial sector. This synergy effect is defined as a difference between the summation of the net GDP increase from the development of each highway sub-link without spatial linkage and the change in GDP resulting from the concurrent development of all links with spatial linkages. Among nine east-west highways in Korea, the East-West 9 highway increases the GDP by 0.3% over the 30-year time period horizon, with 0.016% of the GDP due to the synergy effect. The East-West 9 highway has the largest synergy effect of US$0.164 billion per year on the manufacturing sector of Kwangju Metropolitan Area, resulting in a gain in a regional GRP per capita of US$15.88 per year. Since most synergy effects are generated in less developed regions, highway development can contribute to the reduction in regional disparities.

Keywords: Computable general equilibrium model; Transportation investment; Synergy effect; Regional social accounting matrix (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (14)

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DOI: 10.1080/09535310903444758

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