Domestic transport effects on regional export trade in Greece

Abstract

This paper examines the role of domestic transport on regional export trade in Greece. It aims to understand how changes in the transport conditions of a region can affect its own and neighboring regions' ability to improve foreign trade. The proposed dynamic spatial panel model extends previous ones in the scant related literature, by accounting for spillover effects and own time lagged responses of export flows to changes in variables related, among others, to network distance and accessibility. The results suggest a considerable number of indirect (spatially lagged) effects that are significant for the regional export trade, including those of highway corridors. Agglomeration economies positively affect manufacturing exports by ship and truck in the own prefecture, while manufacturing specialization has a significant impact on maritime transport. It is also shown that failure to account for long-run responses can significantly underestimate the effect of changes in the distance to major transport facilities on export volume. Especially the enhancement of interregional accessibility and market potential has a major impact on the agricultural exports by road. The findings have implications for the coordination of regional investment policies and the planning of the mainland transport system in connection with the location of logistics hubs.