Investing in Port Infrastructure to Lower Trade Costs in East Asia

Journal of East Asian Economic Integration, Vol. 15, No. 2, Summer 2011

30 Pages Posted: 30 Aug 2013

Date Written: June 13, 2011

Abstract

We examine how port infrastructure affects trade and role of transport costs in driving exports and imports for East Asia. Existing studies use survey indexes to explain transport costs. These do not link investment in port infrastructure to transport costs. We include in our estimates a variable to represent the congestion of the ports to explain the transport costs. We find that the port congestion has significantly increased the transport costs from East Asia to the United States. Our analysis suggests that increase in port capacity by 10 percent could cut transport cost in East Asia by up to three percent. This translates into a 0.3 to 0.5 percent across-the-board tariff cut.

Keywords: International Trade, Trade Costs, East Asia, ASEAN, China, Trade Facilitation, Infrastructure, Gravity Model

JEL Classification: F13, F15

Suggested Citation

Abe, Kazutomo and Wilson, John S., Investing in Port Infrastructure to Lower Trade Costs in East Asia (June 13, 2011). Journal of East Asian Economic Integration, Vol. 15, No. 2, Summer 2011, Available at SSRN: https://ssrn.com/abstract=2318301

Kazutomo Abe (Contact Author)

Tokyo Denki University ( email )

5 Senjuasahicho Adachi
Tokyo, 120-8551
Japan

John S. Wilson

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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