Download This PaperOver Land and Over Sea: Domestic Trade Frictions in the Philippines
47 Pages Posted: 5 May 2020
Date Written: Feb 28, 2020
Abstract
We create two novel datasets—the starting dates of Roll-On Roll-Off Terminal System (RRTS) service by route, and interprovincial land trade—to evaluate the effects of the RRTS on agricultural trade costs within the Philippines as measured by border effects. We find province border effects to be substantial in the Philippines, with a typical province trading 28–53 times more with itself than with other provinces. The RRTS reduced this by a factor of 0.65. This is confirmed by increased trade flows, with RRTS province pairs trading 36%–42% more on average compared to similar unconnected province pairs. However, the border effect reduction is unevenly distributed and tends to be limited to provinces near the biggest demand center.
Keywords: border effects, domestic trade, trade costs
JEL Classification: F14, O18, Q10
Suggested Citation: Suggested Citation
