PORT AND LOCAL ECONOMIC DEVELOPMENT: WHAT DIRECTION OF THE IMPACTS ?

It is well known that there are impacts of port activities on local economic development, and that economic activity at the local level influences port development. Yet there is less evidence of which direction prevails (from port to local development or from local to port activities), if any. In this paper, we use a spatial model to assess the relationship between port activity and local economic activity in the context of a developing country, Brazil. We analyze port activity and local economic activity using a panel from 2005 to 2015 for Brazil’s 137 Mesoregions (NUTS3 data), using GDP per capita as local economic variable and total cargo movement as port activity variable. Moreover, we use infrastructure in general (road, rail, airport, and port) as a control variable. Our results are as follows. First, we found evidence of spillover effects (from port to region) that justify the use of a spatial model. Then, we show that there are strong effects of local economic variables in explaining port variables, and that regional infrastructure is of significance. Finally, we show that there are weak but significant effects of port variables on local economic variables and regional infrastructure effects are again significant.