Trade within and between countries can take place by alternative transport modes. Economic and logistical complexity is fostering multimodality as well as transport-mode competition. The international trade literature has given little attention to this issue. The aim of this paper is to analyze transport-mode competition in inter-provincial deliveries within Spain. To this end, we use a novel dataset with fifty inter-provincial, industry-specific flows by four transport modes (road, train, ship and aircraft). We then feed this dataset into various specifications of a gravity model that incorporates cross-sectional dependence attributable to unobservable factors directly associated with implicit and explicit transport-mode competition schemes. In considering alternative distance segments, we also test for competition effects between road and the other three modes.
Carlos Llano Verduras is Professor of Economics at the Department of Economic Analysis, Universidad Autonoma de Madrid, and Research fellow at the Lawrence R. Klein Institute. He holds a PhD in Applied Economics from the Universidad Autonoma de Madrid.