Abstract
Demand for trade transport sector is basically a derived demand for tradable goods. On the other hand, the demand for general industries is influenced by the scale of the transport sector in a trade gateway city. Usually trade transport industries are located near a port or an airport. The locational characteristics have to be considered in order to understand the effect of port/airport policy and trade policy on the regional economy. This paper discusses an open economy multi-region computable general equilibrium model which features the activity of trade related industrial sector, with focus on export and import. The behaviors of the export industry and import industry sectors are explicitly formulated in the model as well as other industrial sector. The numerical analysis presents the implications of the impacts of trade demand shock to trade gateway city and hinterland city.
