Department of Economics and Business Economics

Ray Zhang

The impact of road infrastructure on economic circulation: Market expansion and input cost saving

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The impact of road infrastructure on economic circulation : Market expansion and input cost saving. / Wan, Guanghua; Wang, Xu; Zhang, Rui et al.

In: Economic Modelling, Vol. 112, 105854, 07.2022.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

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Wan G, Wang X, Zhang R, Zhang X. The impact of road infrastructure on economic circulation: Market expansion and input cost saving. Economic Modelling. 2022 Jul;112:105854. doi: 10.1016/j.econmod.2022.105854

Author

Wan, Guanghua ; Wang, Xu ; Zhang, Rui et al. / The impact of road infrastructure on economic circulation : Market expansion and input cost saving. In: Economic Modelling. 2022 ; Vol. 112.

Bibtex

@article{23e674ed6c984810b426ff6782b78bb1,
title = "The impact of road infrastructure on economic circulation: Market expansion and input cost saving",
abstract = "This paper aims at investigating the role of road infrastructure in implementing the “dual circulation” strategy recently launched by China, where increasing domestic consumption is the core. Although earlier studies examined the road-trade cost nexus, few analyzed the effects of road on the costs of output delivery and input sourcing. We first develop a theoretical model, predicting that road development can help reduce both of these costs. The predictions are then confirmed via model estimations using data from China. In turn, cost reduction in output delivery is found to help firms expand market and cost reduction in input sourcing helps firms lower product prices, leading to rises in domestic consumption. Particularly, road development is more beneficial to Non-SOEs, firms with lower export intensity, higher weight-to-value ratio, or higher transportation inputs, and areas with less market distortion. Thus, it can be concluded that road development is conducive to China's “dual circulation” strategy.",
keywords = "Economic circulation, Inventory, Market expansion, Road infrastructure, Sourcing cost of input",
author = "Guanghua Wan and Xu Wang and Rui Zhang and Xun Zhang",
note = "Publisher Copyright: {\textcopyright} 2022 Elsevier B.V.",
year = "2022",
month = jul,
doi = "10.1016/j.econmod.2022.105854",
language = "English",
volume = "112",
journal = "Economic Modelling",
issn = "0264-9993",
publisher = "Elsevier BV",

}

RIS

TY - JOUR

T1 - The impact of road infrastructure on economic circulation

T2 - Market expansion and input cost saving

AU - Wan, Guanghua

AU - Wang, Xu

AU - Zhang, Rui

AU - Zhang, Xun

N1 - Publisher Copyright: © 2022 Elsevier B.V.

PY - 2022/7

Y1 - 2022/7

N2 - This paper aims at investigating the role of road infrastructure in implementing the “dual circulation” strategy recently launched by China, where increasing domestic consumption is the core. Although earlier studies examined the road-trade cost nexus, few analyzed the effects of road on the costs of output delivery and input sourcing. We first develop a theoretical model, predicting that road development can help reduce both of these costs. The predictions are then confirmed via model estimations using data from China. In turn, cost reduction in output delivery is found to help firms expand market and cost reduction in input sourcing helps firms lower product prices, leading to rises in domestic consumption. Particularly, road development is more beneficial to Non-SOEs, firms with lower export intensity, higher weight-to-value ratio, or higher transportation inputs, and areas with less market distortion. Thus, it can be concluded that road development is conducive to China's “dual circulation” strategy.

AB - This paper aims at investigating the role of road infrastructure in implementing the “dual circulation” strategy recently launched by China, where increasing domestic consumption is the core. Although earlier studies examined the road-trade cost nexus, few analyzed the effects of road on the costs of output delivery and input sourcing. We first develop a theoretical model, predicting that road development can help reduce both of these costs. The predictions are then confirmed via model estimations using data from China. In turn, cost reduction in output delivery is found to help firms expand market and cost reduction in input sourcing helps firms lower product prices, leading to rises in domestic consumption. Particularly, road development is more beneficial to Non-SOEs, firms with lower export intensity, higher weight-to-value ratio, or higher transportation inputs, and areas with less market distortion. Thus, it can be concluded that road development is conducive to China's “dual circulation” strategy.

KW - Economic circulation

KW - Inventory

KW - Market expansion

KW - Road infrastructure

KW - Sourcing cost of input

UR - http://www.scopus.com/inward/record.url?scp=85128243264&partnerID=8YFLogxK

U2 - 10.1016/j.econmod.2022.105854

DO - 10.1016/j.econmod.2022.105854

M3 - Journal article

AN - SCOPUS:85128243264

VL - 112

JO - Economic Modelling

JF - Economic Modelling

SN - 0264-9993

M1 - 105854

ER -