Reference : Transportation, freight rates, and economic geography
Scientific journals : Article
Business & economic sciences : Microeconomics
Transportation, freight rates, and economic geography
Behrens, Kristian mailto [Université du Québec, Montréal > > > ; Centre for Economic Policy Research (CEPR) > > > ; Center for Market Studies and Spatial Economics Saint Petersburg Branch National Research University Higher School of Economics]
Picard, Pierre M. mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Journal of International Economics
Elsevier Science
Yes (verified by ORBilu)
[en] Competitive transport markets ; Freight rates ; Trade ; Economic geography
[en] We investigate the role of competitive transport markets in shaping the location of economic activity and the pattern of trade. In our model, carriers supply transport services for shipping manufactured goods, and freight rates are set to clear transport markets. Each carrier must commit to the maximum capacity for a round-trip and thus faces a logistics problem as there are opportunity costs of returning empty. These costs increase the freight rates charged to firms located in regions that are net exporters of manufactured goods. Since demand for transport services depends on the spatial distribution of economic activity, the concentration of production in one region raises freight rates to serve foreign markets from there, thus working against specialization and the agglomeration of firms. Consequently, a more even spatial distribution of firms and production prevails at equilibrium when freight rates are endogenously determined than when they are assumed to be exogenous as in the literature.
Researchers ; Professionals ; Students ; General public,%20freight%20rates,%20and%20economic%20geography.pdf

File(s) associated to this reference

Fulltext file(s):

Limited access
2011-02 - Transportation, freight rates, and economic geography.pdfAuthor postprint633.81 kBRequest a copy

Bookmark and Share SFX Query

All documents in ORBilu are protected by a user license.