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== Abstract ==
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The objective of this study is to assess             the impact of the East-West Highway improvement program on             Georgia’s ability to access international markets. As             highlighted extensively in the literature, improving             transport infrastructure and the efficiency of the logistics             sector can help countries gain competitiveness in             international export markets, which can translate into             faster economic growth and higher income. This study             hypothesizes that investments in the EWH have reduced the             cost of shipping Georgian goods to the rest of the world,             and such reductions should be more significant for goods             transported by road. To estimate the effect of cost             reductions generated by improvements in the EWH, a             gravity-type model in first-differences has been estimated.             The results show that: (i) a 10 percent increase in the             length of upgraded road network predicts a 1.1 percent             increase in exports transported by road while no significant             effect is estimated for exports on other transport modes             (rail, sea, and air); (ii) the resulting increase in exports             by road was reflected by a decrease in exports transported             by sea; (iii) the effect is statistically and economically             significant only for customs offices located along the EWH;             (iv) only exports of time-sensitive products responded             positively and significantly to improvements in the EWH             during the 2006-2015 period; (v) upgrading the entire EWH is             estimated to generate additional export revenues between USD             776 million and USD 1,466 million. It is important to note             that the overall trade generating effect of the investment             is expected to be somewhat lower as the results suggest some             substitution between road and sea transport, but the overall             impact is a significant boost to exports.
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== Original document ==
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The different versions of the original document can be found in:
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* [http://hdl.handle.net/10986/24668 http://hdl.handle.net/10986/24668] under the license http://creativecommons.org/licenses/by/3.0/igo/
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Published on 01/01/2016

Volume 2016, 2016
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