The impact of infrastructure on trade in Central Asia

Abstract

The aim of this paper is to investigate the impact of infrastructure on trade in the case of Central Asian countries. Infrastructure is measured by the aspects of quality and quantity in three Central Asian countries-Kazakhstan, the Kyrgyz Republic, and Tajikistan. Trade flows are measured by the export and import volumes of each of these countries with their main trade partner countries. Empirical estimations are based on panel data for the period 2009-2017. Results show that both the quality and quantity of infrastructure in Central Asia have a positive impact on trade flows. However, estimations by country subsamples show that this effect varies by country. Given the general remote geographical location of Central Asian countries, the findings of this study indicate that a regional approach to the development of infrastructure is important and policy towards infrastructure development should be associated with a further regional economic integration process.

Trade Facilitation, Infrastructure, and International Trade in Central Asian Countries

“…However, relevant literature suggests that this effect may diminish over time (Hulten 2007;Kopp 2007). Karymshakov and Sulaimanova (2021) confirmed this effect for the three Central Asian countries they studied: Kazakhstan, the Kyrgyz Republic, and Uzbekistan. To control for this potential curvilinear effect, the model includes a square of the infrastructure index ( INFRA 2 ).…”

“…Developing trade flows does not depend on infrastructure improvements alone. Trade facilitation measures, including the improvement of regulatory frameworks and the reduction of other barriers, are also critical to expanding external trade (Karymshakov and Sulaimanova 2021). Trade facilitation is approximated in this analysis using the CAREC Program's CPMM TFIs.…”

“…The studies have noted that improving the time and cost of border crossing is important to increasing international trade flows in Central Asia due to the number of landlocked countries in the region (Raballand 2003;Grigoriou 2007;Tanabe, Shibasaki, and Kato 2016). Karymshakov and Sulaimanova (2021) investigated the impact of the quantity and quality of infrastructure on the trade engaged in by Kazakhstan, the Kyrgyz Republic, and Uzbekistan. They found that infrastructure development has had a positive but diminishing effect, which led them to assert that government policy is also crucial to facilitating trade.…”

Economic impacts of transport and energy infrastructure connecting Asia and Europe: an introductory article for the special issue

“…The paper "The Impact of Infrastructure on Trade in Central Asia" (Karymshakov and Sulaimanova 2021) investigates the impact of infrastructure on trade in Kazakhstan, the Kyrgyz Republic, and Tajikistan using panel data of the bilateral trade flows from the national statistical agencies of Kazakhstan and the Kyrgyz Republic; as well as from the National Bank of Tajikistan over the period 2010-2018. The average exports and imports of/to Central Asia are USD379 and USD253 million respectively.…”

“…Their results show that both the quality and quantity of infrastructure in Central Asia have a positive impact on trade flows. Based on their empirical evidence, Karymshakov and Sulaimanova (2021) provide the following policy recommendations. Facilitation of regional trade should be based on regional infrastructure development and regional cooperation.…”