Wednesday, February 3, 2021

Port Integration and Regional Economic Development: Lessons from China

 It has long been established (Haralambides, 2002; 2017; 2019) that unfettered competition among regional ports -often being played one against the other by powerful carrier alliances- leads to unnecessary duplication of effort, excess port capacity and waste of scarce port resources.

The world of business is concentrating, in the pursuit of economies of scale, and what better example could one possibly find than concentration in liner shipping in the form of global shipping alliances. In many countries around the world, earlier efforts to devolution are being reversed and decision-making authority is re-centralized. This is the background behind the concept and advantages of port integration

In a little thing we are working on (to appear in print soon), we have adopted the Difference-in-Differences (DID) model to analyze the effect of PI on urban economic growth, as well as to identify the causes of spatial differences in urban development, possibly due to PI. 

The figure above summarizes our results which are most gratifying: Since 2015, when provincial port consolidation efforts were instigated in China, PI has significantly advanced the economic growth of port-cities (treatment group line), vis à vis provinces where port consolidation has not started yet (comparison group line).

 Interestingly, and again a most gratifying result, the effects of PI increase over time, as they of course should (observe the divergence of the two lines after 2015.


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