The Local Impact of Containerization
71 Pages Posted: 13 Jul 2018 Last revised: 21 Feb 2019
Date Written: July, 2018
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.
JEL Classification: F63, R11, F15
Suggested Citation: Suggested Citation