Research Summary

Overview

My Ph.D. dissertation examines the effects of transportation infrastructure on the international trade pattern in the presence of global production linkages using econometric, geographic information systems (GIS) and computable general equilibrium (CGE) analyses. My current line of research work studies trade and infrastructure in conjunction with economic geography. I particularly want to focus on optimal transportation infrastructure networks, and the effects of infrastructure reforms on the extensive margins of trade in higher value-added goods, integration of developing countries in global value chains, and the dispersion of economic activities across space. Below, I provide a summary of my Ph.D. dissertation and my current research goals.


  1. Baniya, S., and Taniguchi, K. (2021). "Trade Effects of Transportation Infrastructure Reforms in the CAREC Region: A GIS and CGE Analysis,” Asian Development Bank (forthcoming ADB Publication).

This paper investigates the trade effects of ADB-funded transport infrastructure reforms, in terms of railways and roadways, in the CAREC region. To do this, we applied an integration of GIS, econometric and CGE analyses. First, using a georeferenced data from OpenStreetMaps and ADB’s internal transport project documentations on network reforms and features, and GIS analysis, we compute the reduction in bilateral transport times incorporating the potential modal substitution induced by transport reforms in the CAREC region. Then, using econometric analyses, we examine the direct impacts of transport times on trade values and patterns; in particular, we use a two-part model to explore the effects of bilateral transport times on the extensive and intensive margins of trade. We use the average physical geography features of trade partners as the instruments of bilateral transport times to address the endogeneity between trade and infrastructure. Finally, implementing the partial equilibrium impacts of transport time reductions on trade in a firm-heterogeneity CGE model in GTAP, we investigate the additional endogenous effects of transport times on trade arising due to changes in prices and number of varieties. We find that the variation in trade impacts across countries results from both the extent of infrastructure reforms received by countries and the export structure of the countries: time sensitive products have larger trade gains. Further, using the CGE analysis, we find that trade values for CAREC countries increase by 2.04 to 8.72 percent due to additional endogenous effects.


  1. Baniya, S., N. Rocha, and M. Ruta (2020): “The Trade Effects of the New Silk Road: A Gravity Analysis,” Journal of Development Economics, Volume 146, 102467, ISSN 0304-3878, https://doi.org/10.1016/j.jdeveco.2020.102467.

This paper takes a first look at the trade effects of China's Belt and Road Initiative (BRI), also referred to as the New Silk Road, on the 71 countries potentially involved. The initiative consists of several infrastructure projects to improve the land and maritime transportation in the BRI region. We first use a geo-referenced data, whose primary source of geometry is the Delrome Atlas of Earth, and GIS analysis to compute the bilateral trading times before and after the BRI. To conduct the network analysis, we combine the quantity and quality (e.g. speed) of network segments with the network features including the border delays and geographical characteristics along the trade routes. Then, we estimate the effect of improvement in bilateral time to trade on bilateral export values and trade patterns using a gravity model and a comparative advantage model. Finally, we combine the estimates from the regression analysis with the results of the GIS analysis to quantify the potential trade effects of the BRI. The paper finds that (i) the BRI increases trade flows among participating countries by up to 4.1 percent; (ii) these effects would be three times as large, on average, if trade policies complemented the upgrading in transport infrastructure, and (iii) products that use time sensitive inputs, and countries that are highly exposed to the new infrastructure and integrated in global value chains have larger trade gains. We use the physical geography features of transit countries along any trade route as instruments for bilateral trade time to address the endogeneity between trade and infrastructure.


  1. Baniya, S. (2017): “The Effects of Timeliness on the Trade Pattern between Primary and Processed Goods.” IMF Working Paper #17/44. March.

This paper examines the effects of indirect time costs on the trade pattern between primary and processed goods. Indirect time costs are those incurred while accessing intermediate inputs, and they are constructed using the input usage drawn from the U.S. input-output table and Hummels and Schaur (2013)’s calculations of consumers’ willingness to pay for faster delivery. I find that processed goods producers face significantly larger indirect time costs than do primary goods producers. Thus, countries with a greater ability to transport goods on time have a comparative advantage in goods that highly value timely delivery of their inputs, and this comparative advantage pattern is stronger for processed goods as opposed to primary goods. I use countries’ physical geography features as instruments for transportation infrastructure to address the endogeneity between trade and infrastructure.

  1. Baniya, S. and Z. Akgul (2017). "Effects of Transportation Infrastructure on the Export Participation and Composition." Global Trade Analysis Project (GTAP) Resource Paper #5042.

This paper examines the effects of timeliness in trade on the extensive and intensive margins of trade using a computable general equilibrium (CGE) analysis. To do this, we use the GTAP firm-heterogeneity CGE model (Akgul et al., 2016) complemented with the GTAP database version 9. We model the infrastructure reforms as an efficiency change in the variable and fixed export costs using the econometric estimates of the two-part model in Baniya (2017). The direct impacts on export costs arise from the improved ability to access intermediate inputs and to deliver final products on time, whereas, the endogenous effects arise through the changes in the prices and number of varieties. Implementing a targeted shock in the transportation infrastructure quality of South and East Asia region (with low LPI) in the CGE model, we compare the resulting general equilibrium trade impacts across primary and processed goods.

5. Work in Progress

  • Worldwide Optimal Trading Times in the Presence of Multimodal Transport Networks: A GIS Analysis, with Muhammad Ramzan, Clark University.

  • Effects of Trading Times on Firm Migration and Outcomes, with Cong Peng, Harvard University.

  • Effects of Discount Coupons and Site Sales on Gross Merchandise Sales, Overstock.com Inc.

Summary: My current research computes the optimal transport paths and times between cities given the existing worldwide transport networks and features extracted from ESRI in terms of roads, railways and maritime transportation, transit delays and geographical characteristics along the routes. Using this bilateral transport time calculations for multiple years between 2009 and 2019, we intend to examine how the effects of trading times differ across products in terms of their location decisions due to the variation in time sensitivity of products at different production stages. Using the latitude and longitude information for firms extracted from the World Bank’s enterprise survey data, we geographically locate firms for all countries along the worldwide transport networks to try to examine if products integrated into global value chains choose to locate closer to the source of their inputs in order to avoid indirect time costs. That is, we explore the effects of transport times on firm migration and outcomes, and therefore, on the diversification and dispersion of economic activities across space. Due to the possibility of sampling bias in the enterprise survey data, we also utilize a georeferenced data developed using the satellite images on transport networks and built-up footprints for five Central Asian countries in Hanson and Peng (2021) to study the impact of transport times on economic activities for micro-spatial units.

6. Other Research

  • Baniya, S. (2015). ”What Factors Present at the Time of Recruitment Determine the Eventual Success of Economists.” IMF Internal Report, International Monetary Fund.

  • Baniya, S. (2015). ”The Effects of Flexible Work Arrangement Practices on the Labor Productivity.” IMF Internal Report, International Monetary Fund.

  • Baniya, S. and F. P. Shu (2010). ”Determining the Causes of the Recent U.S. Recessions and the Economic Slowdown in China.” Proceedings of the New York State Economics Association. vol. 3, Sept 2010, p. 4-9.