July 2018

The Local Impact of Containerization

Leah Brooks, Nicolas Gendron-Carrier, and Gisela Rua


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 costshifter 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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DOI: https://doi.org/10.17016/FEDS.2018.045

PDF: Full Paper

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Last Update: January 09, 2020