Transformation of World Trade Under Geoeconomic Fragmentation: The Role of International Transport Corridors

This article proposes a conceptual model for the impact of international transport corridors (ITCs) on world trade architecture under geoeconomic fragmentation. This model differs from previous approaches that focus on the economic determinants of transport costs in that it integrates the features of the new economic geography, global value chains theory, and an institutional approach so that geopolitical risks, institutional quality, and network connectivity effects are taken into account. Seven ways in which ITCs affect the geographical structure of trade are identified: creation of trade flows, reorientation of trade flows, production agglomeration, transformation of global value chains, institutional integration, network connectivity, and digitalization of logistics. Those factors are then included in an extended version of the gravity equation. As the world economy makes the transition to a polycentric model, the conclusion supported is that ITCs are evolving from a cost-reduction tool into an element of states’ economic security and an object of geopolitical competition between macro-regional blocs. These results may assist in devising transport system development strategies and foreign economic policy. The model’s applicability is confirmed through a pilot estimation derived from empirical data for Eurasian trade in 2024 using the Poisson PseudoMaximum Likelihood (PPML) method. The resulting estimates from among a cross-sectional sample of 28 directed trade pairs confirm the theoretically expected indications of the coefficients arrived at for transport connectivity, institutional quality, digitalization, and geopolitical risk variables. The article devotes particular attention to determinants of network connectivity and mitigation of bias caused by the endogeneity of infrastructure investments. The proposed approach establishes a methodological foundation for long-term forecasting of spatial integration effects under global market fragmentation.

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