Georgia Economic Impact of East-West Highway Phase 2 : Assessing the Impact of East-West Highway Investments on Exports through Gravity Modeling
The objective of this study is to assess the impact of the East-West Highway improvement program on Georgia’s ability to access international markets. As highlighted extensively in the literature, improving transport infrastructure and the efficien...
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| Format: | Report |
| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/06/26529815/georgia-second-phase-economic-impact-east-west-highway-investments-exports-through-gravity-modeling http://hdl.handle.net/10986/24668 |
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okr-10986-24668 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
TARIFFS EXPORT MARKETS ECONOMIC GROWTH FREE TRADE AGREEMENT PRODUCTION PRICE DISTORTIONS VALUATION ROAD IMPROVEMENTS INCOME INTEREST EXPECTATIONS TRANSPORT INFRASTRUCTURE VEHICLES TRADE BARRIERS EXPORT PERFORMANCE REAL GDP UTILITY MAXIMIZATION TRANSPORT MODE QUALITY OF TRANSPORT EXPORTS TREND ELASTICITY WELFARE TRAVEL SPEED EQUILIBRIUM DISTRIBUTION VARIABLES REDUCTION IN TRAVEL TRAFFIC HIGHWAY SYSTEM ROAD INFRASTRUCTURE ROUTES AIR FREE TRADE TRAVELERS ROAD CAPACITY TUNNEL TRANSPORTATION INFRASTRUCTURE TRENDS ECONOMIC OUTLOOK HIGHWAY INVESTMENTS TRANSPORT MODES TRADE BARRIER TRAVEL COSTS VEHICLE FOREIGN TRADE ROAD COSTS DEVELOPMENT ECONOMICS ROAD NETWORK TRANSPORT INTERSTATE HIGHWAY SYSTEM MODE OF TRANSPORT CUSTOMS EXTERNALITIES TRIPS EXPORT VOLUME MARKETS MODES OF TRANSPORT DOMESTIC TRANSPORT TRADE MODELS HIGHWAY IMPROVEMENT ECONOMIC SIZE INTERNATIONAL ECONOMICS LENGTH OF ROAD IMPORTS TRADE POLICY ROAD IMPROVEMENT ELASTICITY OF SUBSTITUTION INTERNATIONAL FINANCIAL INSTITUTION TRAVEL TIMES TRANSPORT EQUIPMENT HIGHWAY IMPROVEMENT PROJECT INTERNATIONAL GATEWAYS UTILITY TRADE AGREEMENT GROSS DOMESTIC PRODUCT ROUTE INFRASTRUCTURE TAXES INTERNATIONAL STANDARDS GENERAL EQUILIBRIUM CONSUMPTION PRODUCTIVITY GROWTH DRIVING INTERNATIONAL PRODUCTION TRAVEL TRANSPORTATION TRANSIT POLICIES BENEFITS OF TRADE INTERNATIONAL TRADE VALUE COMPETITIVENESS PRODUCTION FUNCTIONS ELASTICITIES EXPORT STRUCTURE UTILITY FUNCTION EXPECTED VALUE CONSUMERS AGRICULTURE ECONOMY TARIFF BARRIERS HIGHWAYS TRANSPORTATION EQUIPMENT BRIDGE REGRESSION ANALYSIS ROADS LENGTH OF ROADS CROSSING TRADE DATA HIGHWAY TRADE ECONOMIC INTEGRATION GDP GOODS THEORY COST OF TRANSPORT GROWTH RATE BILATERAL TRADE INVESTMENT INVESTMENT IN ROADS CUSTOMS OFFICES POSITIVE EXTERNALITIES TRANSIT CORRIDOR TARIFF RAIL TRIP LANES EXPORT BASKET INVESTMENTS ECONOMIC GEOGRAPHY TRANSPORT COSTS OUTCOMES ROAD TRANSPORT TRAVEL TIME ADVERSE EFFECTS INEQUALITY |
| spellingShingle |
TARIFFS EXPORT MARKETS ECONOMIC GROWTH FREE TRADE AGREEMENT PRODUCTION PRICE DISTORTIONS VALUATION ROAD IMPROVEMENTS INCOME INTEREST EXPECTATIONS TRANSPORT INFRASTRUCTURE VEHICLES TRADE BARRIERS EXPORT PERFORMANCE REAL GDP UTILITY MAXIMIZATION TRANSPORT MODE QUALITY OF TRANSPORT EXPORTS TREND ELASTICITY WELFARE TRAVEL SPEED EQUILIBRIUM DISTRIBUTION VARIABLES REDUCTION IN TRAVEL TRAFFIC HIGHWAY SYSTEM ROAD INFRASTRUCTURE ROUTES AIR FREE TRADE TRAVELERS ROAD CAPACITY TUNNEL TRANSPORTATION INFRASTRUCTURE TRENDS ECONOMIC OUTLOOK HIGHWAY INVESTMENTS TRANSPORT MODES TRADE BARRIER TRAVEL COSTS VEHICLE FOREIGN TRADE ROAD COSTS DEVELOPMENT ECONOMICS ROAD NETWORK TRANSPORT INTERSTATE HIGHWAY SYSTEM MODE OF TRANSPORT CUSTOMS EXTERNALITIES TRIPS EXPORT VOLUME MARKETS MODES OF TRANSPORT DOMESTIC TRANSPORT TRADE MODELS HIGHWAY IMPROVEMENT ECONOMIC SIZE INTERNATIONAL ECONOMICS LENGTH OF ROAD IMPORTS TRADE POLICY ROAD IMPROVEMENT ELASTICITY OF SUBSTITUTION INTERNATIONAL FINANCIAL INSTITUTION TRAVEL TIMES TRANSPORT EQUIPMENT HIGHWAY IMPROVEMENT PROJECT INTERNATIONAL GATEWAYS UTILITY TRADE AGREEMENT GROSS DOMESTIC PRODUCT ROUTE INFRASTRUCTURE TAXES INTERNATIONAL STANDARDS GENERAL EQUILIBRIUM CONSUMPTION PRODUCTIVITY GROWTH DRIVING INTERNATIONAL PRODUCTION TRAVEL TRANSPORTATION TRANSIT POLICIES BENEFITS OF TRADE INTERNATIONAL TRADE VALUE COMPETITIVENESS PRODUCTION FUNCTIONS ELASTICITIES EXPORT STRUCTURE UTILITY FUNCTION EXPECTED VALUE CONSUMERS AGRICULTURE ECONOMY TARIFF BARRIERS HIGHWAYS TRANSPORTATION EQUIPMENT BRIDGE REGRESSION ANALYSIS ROADS LENGTH OF ROADS CROSSING TRADE DATA HIGHWAY TRADE ECONOMIC INTEGRATION GDP GOODS THEORY COST OF TRANSPORT GROWTH RATE BILATERAL TRADE INVESTMENT INVESTMENT IN ROADS CUSTOMS OFFICES POSITIVE EXTERNALITIES TRANSIT CORRIDOR TARIFF RAIL TRIP LANES EXPORT BASKET INVESTMENTS ECONOMIC GEOGRAPHY TRANSPORT COSTS OUTCOMES ROAD TRANSPORT TRAVEL TIME ADVERSE EFFECTS INEQUALITY World Bank Georgia Economic Impact of East-West Highway Phase 2 : Assessing the Impact of East-West Highway Investments on Exports through Gravity Modeling |
| geographic_facet |
Europe and Central Asia Georgia |
| description |
The objective of this study is to assess
the impact of the East-West Highway improvement program on
Georgia’s ability to access international markets. As
highlighted extensively in the literature, improving
transport infrastructure and the efficiency of the logistics
sector can help countries gain competitiveness in
international export markets, which can translate into
faster economic growth and higher income. This study
hypothesizes that investments in the EWH have reduced the
cost of shipping Georgian goods to the rest of the world,
and such reductions should be more significant for goods
transported by road. To estimate the effect of cost
reductions generated by improvements in the EWH, a
gravity-type model in first-differences has been estimated.
The results show that: (i) a 10 percent increase in the
length of upgraded road network predicts a 1.1 percent
increase in exports transported by road while no significant
effect is estimated for exports on other transport modes
(rail, sea, and air); (ii) the resulting increase in exports
by road was reflected by a decrease in exports transported
by sea; (iii) the effect is statistically and economically
significant only for customs offices located along the EWH;
(iv) only exports of time-sensitive products responded
positively and significantly to improvements in the EWH
during the 2006-2015 period; (v) upgrading the entire EWH is
estimated to generate additional export revenues between USD
776 million and USD 1,466 million. It is important to note
that the overall trade generating effect of the investment
is expected to be somewhat lower as the results suggest some
substitution between road and sea transport, but the overall
impact is a significant boost to exports. |
| format |
Report |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Georgia Economic Impact of East-West Highway Phase 2 : Assessing the Impact of East-West Highway Investments on Exports through Gravity Modeling |
| title_short |
Georgia Economic Impact of East-West Highway Phase 2 : Assessing the Impact of East-West Highway Investments on Exports through Gravity Modeling |
| title_full |
Georgia Economic Impact of East-West Highway Phase 2 : Assessing the Impact of East-West Highway Investments on Exports through Gravity Modeling |
| title_fullStr |
Georgia Economic Impact of East-West Highway Phase 2 : Assessing the Impact of East-West Highway Investments on Exports through Gravity Modeling |
| title_full_unstemmed |
Georgia Economic Impact of East-West Highway Phase 2 : Assessing the Impact of East-West Highway Investments on Exports through Gravity Modeling |
| title_sort |
georgia economic impact of east-west highway phase 2 : assessing the impact of east-west highway investments on exports through gravity modeling |
| publisher |
World Bank, Washington, DC |
| publishDate |
2016 |
| url |
http://documents.worldbank.org/curated/en/2016/06/26529815/georgia-second-phase-economic-impact-east-west-highway-investments-exports-through-gravity-modeling http://hdl.handle.net/10986/24668 |
| _version_ |
1764457342441619456 |
| spelling |
okr-10986-246682021-05-25T08:49:50Z Georgia Economic Impact of East-West Highway Phase 2 : Assessing the Impact of East-West Highway Investments on Exports through Gravity Modeling World Bank TARIFFS EXPORT MARKETS ECONOMIC GROWTH FREE TRADE AGREEMENT PRODUCTION PRICE DISTORTIONS VALUATION ROAD IMPROVEMENTS INCOME INTEREST EXPECTATIONS TRANSPORT INFRASTRUCTURE VEHICLES TRADE BARRIERS EXPORT PERFORMANCE REAL GDP UTILITY MAXIMIZATION TRANSPORT MODE QUALITY OF TRANSPORT EXPORTS TREND ELASTICITY WELFARE TRAVEL SPEED EQUILIBRIUM DISTRIBUTION VARIABLES REDUCTION IN TRAVEL TRAFFIC HIGHWAY SYSTEM ROAD INFRASTRUCTURE ROUTES AIR FREE TRADE TRAVELERS ROAD CAPACITY TUNNEL TRANSPORTATION INFRASTRUCTURE TRENDS ECONOMIC OUTLOOK HIGHWAY INVESTMENTS TRANSPORT MODES TRADE BARRIER TRAVEL COSTS VEHICLE FOREIGN TRADE ROAD COSTS DEVELOPMENT ECONOMICS ROAD NETWORK TRANSPORT INTERSTATE HIGHWAY SYSTEM MODE OF TRANSPORT CUSTOMS EXTERNALITIES TRIPS EXPORT VOLUME MARKETS MODES OF TRANSPORT DOMESTIC TRANSPORT TRADE MODELS HIGHWAY IMPROVEMENT ECONOMIC SIZE INTERNATIONAL ECONOMICS LENGTH OF ROAD IMPORTS TRADE POLICY ROAD IMPROVEMENT ELASTICITY OF SUBSTITUTION INTERNATIONAL FINANCIAL INSTITUTION TRAVEL TIMES TRANSPORT EQUIPMENT HIGHWAY IMPROVEMENT PROJECT INTERNATIONAL GATEWAYS UTILITY TRADE AGREEMENT GROSS DOMESTIC PRODUCT ROUTE INFRASTRUCTURE TAXES INTERNATIONAL STANDARDS GENERAL EQUILIBRIUM CONSUMPTION PRODUCTIVITY GROWTH DRIVING INTERNATIONAL PRODUCTION TRAVEL TRANSPORTATION TRANSIT POLICIES BENEFITS OF TRADE INTERNATIONAL TRADE VALUE COMPETITIVENESS PRODUCTION FUNCTIONS ELASTICITIES EXPORT STRUCTURE UTILITY FUNCTION EXPECTED VALUE CONSUMERS AGRICULTURE ECONOMY TARIFF BARRIERS HIGHWAYS TRANSPORTATION EQUIPMENT BRIDGE REGRESSION ANALYSIS ROADS LENGTH OF ROADS CROSSING TRADE DATA HIGHWAY TRADE ECONOMIC INTEGRATION GDP GOODS THEORY COST OF TRANSPORT GROWTH RATE BILATERAL TRADE INVESTMENT INVESTMENT IN ROADS CUSTOMS OFFICES POSITIVE EXTERNALITIES TRANSIT CORRIDOR TARIFF RAIL TRIP LANES EXPORT BASKET INVESTMENTS ECONOMIC GEOGRAPHY TRANSPORT COSTS OUTCOMES ROAD TRANSPORT TRAVEL TIME ADVERSE EFFECTS INEQUALITY The objective of this study is to assess the impact of the East-West Highway improvement program on Georgia’s ability to access international markets. As highlighted extensively in the literature, improving transport infrastructure and the efficiency of the logistics sector can help countries gain competitiveness in international export markets, which can translate into faster economic growth and higher income. This study hypothesizes that investments in the EWH have reduced the cost of shipping Georgian goods to the rest of the world, and such reductions should be more significant for goods transported by road. To estimate the effect of cost reductions generated by improvements in the EWH, a gravity-type model in first-differences has been estimated. The results show that: (i) a 10 percent increase in the length of upgraded road network predicts a 1.1 percent increase in exports transported by road while no significant effect is estimated for exports on other transport modes (rail, sea, and air); (ii) the resulting increase in exports by road was reflected by a decrease in exports transported by sea; (iii) the effect is statistically and economically significant only for customs offices located along the EWH; (iv) only exports of time-sensitive products responded positively and significantly to improvements in the EWH during the 2006-2015 period; (v) upgrading the entire EWH is estimated to generate additional export revenues between USD 776 million and USD 1,466 million. It is important to note that the overall trade generating effect of the investment is expected to be somewhat lower as the results suggest some substitution between road and sea transport, but the overall impact is a significant boost to exports. 2016-07-12T18:14:10Z 2016-07-12T18:14:10Z 2016-06-27 Report http://documents.worldbank.org/curated/en/2016/06/26529815/georgia-second-phase-economic-impact-east-west-highway-investments-exports-through-gravity-modeling http://hdl.handle.net/10986/24668 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Economic & Sector Work :: Other Infrastructure Study Economic & Sector Work Europe and Central Asia Georgia |