Trucking Costs and the Margins of Internal Trade

• Tác giả: Somik Lall
• Ngôn ngữ: eng
• Ký hiệu phân loại: 665.54 Storage, transportation, distribution
• Thông tin xuất bản: World Bank, Washington, DC, 2023
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 304261
• Chủ đề: 1. COVID-19 IMPACT ON SUPPLY CHAIN; 2. NETWORK EXTERNALITY; 3. SPATIAL MARGIN OF TRADE; 4. TRADE ELASTICITY; 5. TRUCKING COST

Tóm tắt

This paper uses data on nearly half a million actual shipments from a trucking portal in India to provide evidence on how trucking costs depend on route characteristics and affect the intensive and extensive margins of shipment flows. The empirical analysis using pre-pandemic data (before March 24, 2020) confirms the presence of thick market externalities along a route and spillovers across routes due to network externalities, both of which confer advantages to origins and destinations with larger market sizes. The paper utilizes exogenous variations in value-added tax on gasoline across states to provide causal estimates of the elasticity of shipment flows with respect to trucking costs. The empirical estimates suggest that a 1 percent increase in trucking unit costs reduces trade flows by 2.8-3.9 percent. On the extensive margin of trade, three eastern states and several smaller territories constitute isolated regions that were largely cut off from the trading networks during the pre-pandemic period. Trucking costs increased by 32 percent during the early post-lockdown period (June 2020 to February 2021). The increase was greater along longer routes. In the short run, the increase in freight rates led to a proportionate decrease in trade flows across states. It pushed a significant number of poorer and remoter states into the ranks of isolated regions.