International transport infrastructure and regional economic development

Karsten Mau, Mingzhi (Jimmy) Xu and Yawen Zheng
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Karsten Mau: RS: GSBE MORSE, RS: GSBE FSD, RS: GSBE other - not theme-related research, Macro, International & Labour Economics

No 1, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: We evaluate how access to international transport infrastructure promotes trade and economic development. Exploiting the gradual unfolding of transcontinental rail freight connections between China and Europe, our empirical findings indicate increasing exports from connected cities, with positive spillovers to other transport modes, neighboring cities, and indicators of economic activity. Not all products and cities are equally responsive to new rail export opportunities. We set up a multi-sector heterogeneous firms model with a rich specification of trade costs, in which firms optimize trade costs by choosing alternative transportation modes and routes. Leveraging a unique data set on trade flows between Chinese cities, we calibrate our model to discuss local welfare effects, relying on a sufficient statistic that quantifies changes in city-level trade costs. We also highlight significant spatial distributional effects of trade infrastructure development.

JEL-codes: F14 F15 R11 R41 (search for similar items in EconPapers)
Date: 2025-01-16
New Economics Papers: this item is included in nep-cna, nep-geo, nep-int, nep-tre and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2025001

DOI: 10.26481/umagsb.2025001

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