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Roadways, input sourcing, and patterns of specialization

Jaimovich, Esteban (2019) Roadways, input sourcing, and patterns of specialization European Economic Review, 120, 103319. pp. 1-20.

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We propose a model where the internal transport network facilitates the sourcing of intermediate goods from geographically diffuse locations. A denser internal transport network promotes thus the growth of industries that rely on a large variety of inputs. The model shows that heterogeneities in internal transport infrastructures can become a key factor in shaping comparative advantage and specialization. Evidence based on industry-level trade data grants support to the main prediction of the model: countries with denser road networks export relatively more in industries that exhibit broader input bases. We show that this correlation is robust to several possible confounding effects proposed by the literature, such as the impact of institutions on specialization in complex goods. Furthermore, we show that a similar correlation arises as well when the density of the local transport network is measured by the density of their internal waterways, and also when road density is instrumented with measures of terrain roughness.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > School of Economics
Authors :
Date : November 2019
DOI : 10.1016/j.euroecorev.2019.103319
Copyright Disclaimer : © 2019. This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Uncontrolled Keywords : International trade; Comparative advantage; Internal transportation costs
Depositing User : Clive Harris
Date Deposited : 15 Oct 2019 15:28
Last Modified : 15 Oct 2019 15:28

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