The Review of Economics and Statistics Vol. 100 No. 4 2018

The World Is Not Yet Flat: Transport Costs Matter!

Kristian Behrens¹; W. Mark Brown²; Théophile Bougna³

¹ Université du Québec à Montréal, National Research University Higher School of Economics, CIRPÉE, and CEPR · ² Statistics Canada · ³ Université du Québec à Montréal and World Bank

Abstract

The paper provides evidence of the effects of changes in transport costs on the geographic concentration of industries. The analysis uses micro-level commodity flow data and micro-geographic plant-level data to construct industry-specific ad valorem trucking rates and continuous measures of geographic concentration. The findings show that, controlling for international trade exposure and input-output links, increasing trucking rates are significantly associated with declining geographic concentration. The effect is large: changes in trucking rates explain around 20 percent of the observed decline in geographic concentration of Canadian manufacturing industries between 1992 and 2008.

DOI

10.1162/rest_a_00729

Volume

100

Issue

4

Pages

712-724

Language

en

Sources

openalex crossref

Cite

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