The Local Impact of Containerization
Nicolas Gendron-Carrier () and
No 2018-045, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (US)
We investigate how containerization impacts local economic activity. Containerization is premised on a simple insight: packaging goods for waterborne trade into a standardized container makes them dramatically cheaper to move. We use a novel cost-shifter instrument -- port depth pre-containerization -- to contend with the non-random adoption of containerization by ports. Container ships sit much deeper in the water than their predecessors, making initially deep ports cheaper to containerize. Consistent with New Economic Geography models, we find that counties near container ports grow an additional 70 percent from 1950 to 2010. Gains predominate in counties with initially low population density and manufacturing.
Keywords: Containerization; Globalization; Local economic activity (search for similar items in EconPapers)
JEL-codes: F63 R11 F15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-int and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2018-45
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