An application of an integrated transport network - multiregional CGE model to the calibration of synergy effects of highway investments

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Abstract

A transportation network-multiregional CGE model is applied to estimate the synergy effects of a set of highway projects on value added by region and industrial sector. This synergy effect is defined as a difference between the summation of the net GDP increase from the development of each highway sub-link without spatial linkage and the change in GDP resulting from the concurrent development of all links with spatial linkages. Among nine east-west highways in Korea, the East-West 9 highway increases the GDP by 0.3% over the 30-year time period horizon, with 0.016% of the GDP due to the synergy effect. The East-West 9 highway has the largest synergy effect of US$0.164 billion per year on the manufacturing sector of Kwangju Metropolitan Area, resulting in a gain in a regional GRP per capita of US$15.88 per year. Since most synergy effects are generated in less developed regions, highway development can contribute to the reduction in regional disparities.

Original languageEnglish (US)
Pages (from-to)377-397
Number of pages21
JournalEconomic Systems Research
Volume21
Issue number4
DOIs
StatePublished - Dec 1 2009

Keywords

  • Computable general equilibrium model
  • Regional social accounting matrix
  • Synergy effect
  • Transportation investment

ASJC Scopus subject areas

  • Economics and Econometrics

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