Working Paper
The Local Impact of Containerization
Abstract: We investigate how containerization impacts local economic activity. Containerization is premised on a simple insight: packaging goods for waterborne trade into a standardized container makes them dramatically cheaper to move. We use a novel cost-shifter instrument -- port depth pre-containerization -- to contend with the non-random adoption of containerization by ports. Container ships sit much deeper in the water than their predecessors, making initially deep ports cheaper to containerize. Consistent with New Economic Geography models, we find that counties near container ports grow an additional 70 percent from 1950 to 2010. Gains predominate in counties with initially low population density and manufacturing.
Keywords: Containerization; Globalization; Local economic activity;
JEL Classification: F63; R11; F15;
https://doi.org/10.17016/FEDS.2018.045
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File(s): File format is application/pdf https://www.federalreserve.gov/econres/feds/files/2018045pap.pdf
Bibliographic Information
Provider: Board of Governors of the Federal Reserve System (U.S.)
Part of Series: Finance and Economics Discussion Series
Publication Date: 2018-07-10
Number: 2018-045
Pages: 68 pages