Transport accessibility of the territory as a factor in the location of international production - International business

Transport accessibility of the territory as a factor in the allocation of international production

Transport is rightly considered a key factor in the formation of economic and social space. The special position of transport is explained as follows. First, the transport infrastructure supports and simplifies commercial activities, providing geographic accessibility of the region. Secondly, transport networks, being a central element in ensuring sectoral and intra-firm restructuring, play a crucial role in the integration of the regional market, providing physical access to all components of the economic system.

The essence of transportation from a spatial point of view can be defined as the "relationship indicator between territories". Therefore, we can say that the role of transport is determined primarily by the structure of the regional economy. Industries have varying degrees of sensitivity to changes in the transport sector. In this regard, the three following groups of industries that have similar reactions to changes in conditions of transport are distinguished.

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1. Industries in which the changing transport conditions cause a redistribution of commercial activities between regions. The main characteristics of enterprises in this case will be either a relatively high share of transportation costs in the total cost of production and the desire to reduce it, or attempts to move production closer to the markets in order to expedite delivery and ensure the safety of goods. This includes the traditional manufacturing industries with a share of transportation costs of 10% or more in the total value of goods and a number of service industries (including high-tech, business and financial services) related to the mobility of their employees.

2. Export-oriented and import-substituting industries whose enterprises are outside the regional markets. The transport component ns has a significant influence on the feasibility of commercial activities. However, modernization of the transport sector contributes to the development of these sectors.

3. Industries related to business oriented to the local market and not requiring long-term transport. The impact of the transport factor for such industries will be minimal. This group includes retail, local business services, small construction companies, utilities. The success of this group of industries depends on the prosperity of local consumers, their products and services. At the same time, cheap transport services facilitate penetration of competitive goods to the market from other regions.

The transport infrastructure affects the economic development of not only its own, but also other, sometimes remote regions. The estimated impacts are mainly expressed in changes in transport costs on individual routes. A standard analytical approach to determining transportation costs is to consider transport services through the prism of value added. The benefits of trade can be realized only if transport costs are less than the difference in prices for goods in the regions. Noticeable interregional price differences remain due to the need to overcome the relevant obstacles.

The wave of technical revolutions in transport that occurred in the last quarter of the 20th century, the optimization of the configuration of the transport infrastructure led to a reduction in the share of transportation costs in total production costs. During the same period, commercial policy began to play a more important role. As a result, at the end of the XX century. there was a general tendency to reduce both the share of ad valorem customs tariffs and transport costs in the cost of export-import products. During the period from 1982 to 1992, the share of ad valorem tariffs decreased from 4.8 to 4.2%, transport costs fell from 5.6 to 4.1%, total trade costs fell from 10.4 to 8.3%. Of the 20 commodity groups examined, an increase in the corresponding figures only affected oil: 0.4-0.9, 5.2-8.3, 5.6-9.3%, respectively.

Five different methods for estimating transportation costs can be distinguished:

1) & quot; ad valorem costs of an iceberg & quot ;;

2) approaches based on the estimation of geographical distance;

3) calculation of transportation costs based on estimates of the baseline conditions for exports and imports of goods (C1F/FOB);

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4) real freight costs;

5) based on estimates of supply and demand.

Let's consider the listed techniques. P. Samuelson in 1952 developed the so-called iceberg cost approach . The name of this method is due to the fact that most of the cost of transportation is hidden as the bottom of the iceberg. In the framework of this theory, it is assumed that transport is not a separate sector of the national economy, but represents an "implicit consumption of goods in transit". Samuelson explains this fact as follows. The price of the product in the region of its production is lower than the price in the consumption markets. Therefore, for a fixed amount you can buy in the regions of consumption a smaller amount of goods. The difference in purchase volumes expressed in physical units in the markets of production and consumption regions determines this implicit consumption of the goods. This means that transportation costs represent an obstacle in the process of overcoming which resources are differentially consumed depending on the characteristics of the product. In this case, the transport tariff depends not only on the distance, but also on the properties of the product being transported.

In turn, the estimation of geographical distance is quite convenient for calculating transport costs. At the same time, an increase in the length of the route leads to an increase in transportation costs, which ultimately hampers the development of trade. However, a comprehensive analysis of the gravity equation showed that doubling the distance of transportation leads to a decrease in trade volumes by half.

In order to estimate transport costs in examining the economic impact of transport costs on interregional trade, the difference between import and export prices used in the maritime transport of goods (CIF and FOB) is often considered. With this kind of methodology, you can not agree, since it does not take into account the transportation of goods by land transport. But, nevertheless, they are one of the best available methods, as they seem much more accurate than calculations within the iceberg cost approach or distance. This characteristic is due primarily to the fact that the cost of the sea component of transportation is calculated on the basis of the actual costs incurred by the shipper.

Meditate alone

What is the main disadvantage of the method for estimating transportation costs based on the difference in the import and export prices of goods (the basic conditions for the delivery of CIF and FOB)? How much does this method affect the accuracy of transport cost estimates?

Demand and supply form a method for determining the size of transportation costs. The proposal forms the capabilities of individual elements of the transport system. Here there is a classical market law: the worse the transportation services demanded by the buyer are, the more expensive they are. An illustration of this situation is fluctuations in tariffs for cargo handling in ports of one region, including the Baltic Sea region. Demand for transportation is formed, first of all, proceeding from the forecasted profit received from realization of the goods demanding transportation.

It is important to assess not only the direct impact of the new infrastructure on overall transit costs and time, but also the effect of the availability of this infrastructure.

Practice questions

Large objects, for example, the tunnel under the Channel, the bridge over the Öresund strait, the Alpine tunnels, facilitate the creation of new infrastructure in remote regions. However, they increase the congestion of key routes. Therefore, the modernization of the regional transport infrastructure is largely due to the construction of large facilities.

Construction of a new large transport infrastructure facility, in addition to influencing the geographical location of individual firms, markets and sources of resources, can change the status of the country or region. The tunnel under La Manche changed the island status of Great Britain, connecting it with the object of fixed infrastructure with the mainland. This led to a greater geographical concentration of production within the EU.

Consider the role of the transport factor in the location of production. To do this, we estimate the degree of its impact on the availability of markets for resources and marketing and investment activity in the region.

Improved access of individual firms and regions to transport resources allows them, with all other equal production conditions, to extract additional profits and thereby increase the competitiveness of products. This process has positive consequences for rapidly growing regions and regions that have a noticeable effect on the scale of production, such as large megacities.

Practice questions

To increase the competitiveness of domestic producers in the US Transport Strategy for the period to 2030, approved by the US Government Decree No. 1734-r of 22.11.2008, there is a need to increase the commercial speed of goods in the sphere of cooperative supplies at the regional and federal levels " door to door & quot; and reduce the share of direct transport costs by 1.5-2 times in the cost of goods.

Identified and the reverse effect. Growing commodity flows are seen as the main factor in the demand for infrastructure services. The use of transport facilities brings revenues to the regional budget. In modern conditions, this bilateral influence is increasing.

Changing the location of factors of production can lead to an increase in welfare, the main elements of which are the level and differentiation of the incomes of the population. The income level as a whole is the result of the development of the country's economy and the availability of natural resources in it. The magnitude of the welfare effect is relatively independent of the degree of elasticity of replacement of domestic goods imported. This is because the low elasticity of replacement makes foreign goods less attractive. Without considering the functioning of the national market, the welfare effect could be even greater. At the same time, the effect of industrial overproduction on international trade inevitably leads to a reduction in this effect.

From a household perspective, transportation services are estimated in time and cost indicators. Rationalization of transportation leads to a decrease in its cost. Therefore, most of the income of the farm can be spent on other goods (services). It is shown that "reducing transport costs by 15-20 percent is equivalent to increasing consumption of products and services by 1.5 percent."

Reducing time spent contributes to the release of time, which can be spent on additional entrepreneurial activity or to participate in the consumption process. Negative effects of the transport process, such as air pollution or noise, should also be taken into account when determining the cost and time benefits, in the process of assessing the capabilities of individual modes of transport or transportation routes. Modernization of transport infrastructure, allowing to increase the speed of passenger traffic, can facilitate the placement of workers' accommodation away from production areas, reducing the density of population and thus causing significant changes in consumption patterns. Thus, depending on the degree of accessibility of the region, the benefits and costs of transportation ultimately affect people's well-being.

Investments in the transport infrastructure of the region lead to an increase in the cost of labor and resources used in the production process, along with the value of land, the accumulated investment and the effect of agglomeration. By investing in the transport and communications industries, governments and businesses can benefit from the spatial distribution of productive activities. However, the modernization of the region's transport system does not automatically guarantee its accelerated development, especially where the infrastructure is still imperfect. Thus, P. Rietveld and P. Nijkamp give a scheme of the ambiguous influence of the modernization of transport infrastructure on the economy of the region (Figure 5.1). In particular, they lead to a decrease in regional production and employment.

Effects of transport infrastructure modernization

Fig. 5.1. Effects of transport infrastructure upgrades

The relationship between public and private infrastructure investment is explained by macroeconomic models that take into account several types of impacts. The multiplicative effects of public investment have a positive impact on private investment. The effects of substitution ( crowding effects) suggest an increase in interest rates and the subsequent reduction in net investment in the economy, caused by the growth of government loans in the money market. They can have a negative impact on private investment. Substitution takes place, as infrastructure investments lead to higher interest on projects that are financed with the help of the state, which ultimately hampers private investment. Another type of effect - additional income ( spin-off effects), usually not considered in macroeconomic models, involves the allocation of separate economic units from the company that specialize in specific activities. This allows you to get additional unforeseen income in addition to the pre-planned.

Practice questions

To. Harris, separating the purely transport effect from a deeper economic effect, showed that investments in road and rail infrastructure in the rural areas of the US increased real employment in the first two years. These net transport effects did not have a serious impact on other types of employment in these regions, because most of the trade flows are unified and transit. Subsequently, the effects of additional income had a negative impact on the regional labor market. A similar effect was observed in the central regions with a developed network of ports and airports through which transit flows pass. However, the creation of qualitatively new objects of transport infrastructure can affect the process of locating productive activities, leading to a deeper economic effect.

Analysis of the impact of transport on the regional and international economy shows the lack of an unequivocal evaluation of researchers. The role of transport in ensuring interregional and international mobility of the region's material resources has been more actively discussed for many years by recognized scientists. At the same time, the study of this issue is extremely important, since modern economic development can not be isolated from external influences.

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