This paper examines how cities and regions within countries are likely to adjust to trade openness and improved connectivity driven by large transport investments from China's Belt and Road Initiative. The paper presents a quantitative economic geography model alongside spatially detailed information on the location of people, economic activity, and transport costs to international gateways in Central Asia to identify which places are likely to gain and which places are likely to lose. The findings are that urban hubs near border crossings will disproportionately gain while farther out regions with little comparative advantage will be relative losers. Complementary investments in domestic transport networks and trade facilitation are complementary policies and can help in spatially spreading the benefits. However, barriers to domestic labor mobility exacerbate spatial inequalities whilst dampening overall welfare.
Details
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Author
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Document Date
2019/04/08
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Document Type
Policy Research Working Paper
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Report Number
WPS8806
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2019/04/08
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Disclosure Status
Disclosed
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Doc Name
Who Wins, Who Loses ? Understanding the Spatially Differentiated Effects of the Belt and Road Initiative
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Keywords
transport cost; investments in transport infrastructure; access to world market; share of employment; access to foreign market; constant elasticity of substitution; real wage; welfare gains; migration costs; comparative advantage; dry port; welfare impact; export sector; Trade and Transport; pattern of development; trade and transportation; terms of trade; high internal migration; indirect utility function; economic geography; employment in agriculture; number of workers; high population density; change in population; quality of transport; types of road; labor supply elasticity; price of export; agricultural production system; standard economic analysis; central command system; economies of scale; movement of people; urban labor market; pattern of trade; rehabilitation of road; mobility worker; reducing trade barriers; valuation of land; unit labor; amount of land; unit of labor; pattern of specialization; trade and investment; opportunities for education; relative price; land rent; trade costs; labor mobility; ad valorem; transport time; employment share; rail corridor; domestic hub; transport network; global market; spatial inequality; traded goods; international gateway; border investments; land area; domestic labor; tariff equivalent; border crossing
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Citation
Lall,Somik V. Lebrand,Mathilde Sylvie Maria
Who Wins, Who Loses Understanding the Spatially Differentiated Effects of the Belt and Road Initiative (English). Policy Research working paper,no. WPS 8806 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/292161554727963020/Who-Wins-Who-Loses-Understanding-the-Spatially-Differentiated-Effects-of-the-Belt-and-Road-Initiative