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Journal of Economic Integration 2011 December;26(4) :624-650.
DOI: https://doi.org/10.11130/jei.2011.26.4.624
The Trade Impact of Enhanced Multimodal Connectivity in the Asia-Pacific Region

Ben Shepherd Ramonette B. Serafica Akhmad Bayhaqi Hao Jing 

Developing Trade Consultants Ltd.
Australia Indonesia Partnership for Economic Governance
APEC Policy Support Unit
Copyright ©2011 Journal of Economic Integration
ABSTRACT

This paper develops new measures of multimodal transport connectivity, and uses a gravity model to show that improving performance could lead to major trade gains for the Asia-Pacific region. By improving multimodal connectivity by 5%, APEC would increase exports by around 4%, or between 2% and 6% per member economy. In dollar terms, this equates to an impact gain of $500bn in total, or between $850m and $115bn per member economy. Economies that are open, highly integrated into world markets, and with strong connectivity baselines stand to gain the most. We also find that of the elements of multimodal transport connectivity, it is logistics services performance that generally has the strongest effect on trade.

JEL Classification: F13, F15

Keywords: International trade | Transport | Logistics | Asia-Pacific
 
REFERENCE
1. Anderson, J. E. & Van Wincoop, E. (2003), Gravity with gravitas: a solution to the border puzzle. American Economic Review, 93(1), 170-192.
2. Anderson, J. & Van Wincoop, E. (2004), Trade costs. Journal of Economic Literature, 42(3), 691-751.
3. APEC Transportation Working Group, and the Australian Department of Transport and Regional Services, 2007. Liberalization of air services in the APEC region, 1995-2005. Prepared by the Centre for Asia Pacific Aviation.
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