Volume 4 (2016-2017) Issue 1 Pages 159-177
This paper analyzes the expected impacts of improved border-crossing services on international freight transportation in Central Asia (CA). It develops a freight traffic network-assignment model based on the user equilibrium principle, and the developed model is combined with a global general equilibrium model to analyze the impacts of infrastructure development on regional economy and trade. Three cases are simulated to assess the improved border-crossing services. The results show that improvements in border-crossing service provision significantly decrease international transportation costs and boost trade flows in and out of CA in the short run. However, further growth of regional trade causes traffic congestion, which leads to an increase in international transportation costs, potentially reducing long-run trade volumes to and from CA. The analysis thus suggests that further improvement of CA transportation services is a prerequisite for the sustainable growth of regional trade.