Book ; Article ; Online: Building Bridges
The Effect of Major Infrastructure Development on Trade
2022
Abstract: We provide evidence of a positive effect of major infrastructure development on international trade, using the opening of the fixed link between Denmark and Sweden in 2000 (The Oresund Bridge) as a quasi-natural experiment. Our Synthetic Control Method ( ... ...
Abstract | We provide evidence of a positive effect of major infrastructure development on international trade, using the opening of the fixed link between Denmark and Sweden in 2000 (The Oresund Bridge) as a quasi-natural experiment. Our Synthetic Control Method (SCM) constructs a counterfactual Danish-Swedish trade relationship, which represents bilateral trade in the absence of the bridge. Evaluating actual trade against its synthetic counterpart for the period 2001-2008 shows that Danish-Swedish trade was 24.6% larger than it would have been in the absence of the bridge using our preferred specification. The result is robust to standard sensitivity checks. We supplement our analysis with a standard Difference-in-differences (DiD) estimator, which uses fixed effects. The DiD estimator yields a slightly larger trade effect of 26.7%, and is robust to a number of sensitivity analyses, including estimation at the product level. Both our SCM and DiD point to the trade-boosting effects being gradual. |
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Keywords | ddc:330 ; F14 ; F15 ; Fixed link ; bridge ; tunnel ; transport infrastructure ; trade ; Synthetic Control Method ; Difference-in-differences |
Subject code | 381 |
Language | English |
Publisher | Lund: Lund University, School of Economics and Management, Department of Economics |
Publishing country | de |
Document type | Book ; Article ; Online |
Database | BASE - Bielefeld Academic Search Engine (life sciences selection) |
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