Working Paper #2013-032
How big is the impact of infrastructure on trade? Evidence from meta-analysis
Low levels of infrastructure quality and quantity can create trade
impediments through increased transport costs. Since the late 1990s an
increasing number of trade studies have taken infrastructure into
account. The purpose of the present paper is to quantify the importance
of infrastructure for trade by means of meta-analysis and
meta-regression techniques that synthesize various studies. The type of
infrastructure that we focus on is mainly public infrastructure in
transportation and communication. We examine the impact of
infrastructure on trade by means of estimates obtained from 36 primary
studies that yielded 542 infrastructure elasticities of trade. We
explicitly take into account that infrastructure can be measured in
various ways and that its impact depends on the location of the
infrastructure. We estimate several meta-regression models that control
for observed heterogeneity in terms of variation across different
methodologies, infrastructure types, geographical areas and their
economic features, model specifications, and publication
characteristics. Additionally, random effects account for between-study
unspecified heterogeneity, while publication bias is explicitly
addressed by means of the Hedges model. After controlling for all these
issues we find that a 1 per cent increase in own infrastructure
increases exports by about 0.6 per cent and imports by about 0.3 per
cent. Such elasticities are generally larger for developing countries,
land infrastructure, IV or panel data estimation, and macro-level
analyses. They also depend on the inclusion or exclusion of various
common covariates in trade regressions.
- Keywords
-
- Infrastructure
- Trade
- Transportation
- Communication
- Public Capital
- Meta-Analysis
- JEL codes
-
- F10
- H54
- R53
- C10
- F1
- R4
Cite this as
APA 7th ed.Celbis, M. G., Nijkamp, P., & Poot, J. (2013). How big is the impact of infrastructure on trade? Evidence from meta-analysis (UNU-MERIT Working Paper No. 2013-032). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=4951