Evaluating the Impact of Logistics Hub Formation in Isfahan Province on Regional Economy Based on Two-Regional Computable General Equilibrium Model

Document Type : Research Paper

Authors

Department of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

Abstract

The present study has evaluated the impact of logistics hub formation in Isfahan province on this province.
 In this regard, by designing and developing a two regional Computable General Equilibrium (CGE) model (Isfahan province and other national economies), the economic effects resulting from the reduction of transportation cost (logistics cost) as a result of applying this logistics policy on this province has been evaluated. In this model, which is widely based on the theory of New Economic Geography (NEG), there are 3 basic assumptions including: 1- Iceberg-type transportation cost; 2- the utility function of Dixit-Stiglitz (1977) type and 3- the production function of the industrial sector with increasing returns technology has been taken into account. The main database used in the estimation of this model is the two-regional Social Accounting Matrix (SAM) obtained by adjusting the two-regional input-output table calculated by the researchers with the new mixed CHARM-RAS method.
The findings revealed that the establishment of a logistics hub in this province leads to industrial agglomeration, increase in employment, total gross production and labor productivity. Therefore, the application of this logistics policy has a positive economic effect on the region - without considering the environmental effects of such agglomeration.
JEL Classification: D58، E60، O18، R13

Keywords

Main Subjects

References

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History

  • Receive Date: 22 January 2023
  • Revise Date: 17 June 2023
  • Accept Date: 02 July 2023

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