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Board of Governors of the Federal Reserve System (US)
Finance and Economics Discussion Series
The Local Impact of Containerization
Leah Brooks
Nicolas Gendron-Carrier
Gisela Rua
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.


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Leah Brooks & Nicolas Gendron-Carrier & Gisela Rua, The Local Impact of Containerization, Board of Governors of the Federal Reserve System (US), Finance and Economics Discussion Series 2018-045, 10 Jul 2018.
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Keywords: Containerization ; Globalization ; Local economic activity
DOI: 10.17016/FEDS.2018.045
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