All Aboard: The Effects of Port Development

100 Pages Posted: 2 Dec 2020 Last revised: 9 Nov 2021

See all articles by Cesar Ducruet

Cesar Ducruet

affiliation not provided to SSRN

Réka Juhász

University of British Columbia (UBC); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Dávid Krisztián Nagy

Princeton University

Claudia Steinwender

Ludwig Maximilian University of Munich (LMU)

Date Written: November 2020

Abstract

Transport infrastructure facilitates the fast flow of goods and people across space, but it also occupies extensive amounts of land. This may drive up land rents and crowd out other economic activity. Using the introduction of containerized shipping â?? a relatively land-intensive technology â??, we find an important role for this crowding-out effect. At the local level, we find that seaport development increases city population by making a city more attractive, but this well-known market access effect is offset by the crowding-out mechanism. At the aggregate level, while we estimate overall welfare gains from containerization, our quantitative model featuring endogenous port development also implies i) sizeable welfare costs associated with the increased land-usage of ports, and ii) sizeable gains from cities' endogenous specialization across port- and non-port activities. These mechanisms are particularly important for targeted port development policies, which we illustrate by evaluating the effects of the Maritime Silk Road.

Keywords: Containerization, Port Development, Quantitative Economic Geography

JEL Classification: F6, O33, R40

Suggested Citation

Ducruet, Cesar and Juhász, Réka and Nagy, Dávid Krisztián and Steinwender, Claudia, All Aboard: The Effects of Port Development (November 2020). CEPR Discussion Paper No. DP15487, Available at SSRN: https://ssrn.com/abstract=3737622

Cesar Ducruet (Contact Author)

affiliation not provided to SSRN

No Address Available

Réka Juhász

University of British Columbia (UBC) ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z4
Canada

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Dávid Krisztián Nagy

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

Claudia Steinwender

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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