Humphrey, Richard MartinIimi, AtsushiMelibaeva, Sevara2015-07-142015-07-142015-06https://hdl.handle.net/10986/22151Firms normally keep certain inventories, including raw materials, work-in-progress, and finished goods, to operate seamlessly and not to miss possible business opportunities. But inventory is costly, and the optimal firm inventory differs depending on various economic conditions, including trade and transport costs. The paper examines firm inventory behavior in East Africa, in which transport connectivity, especially to the ports, is considered as one of the major business constraints. Using firm-level data from Burundi, Kenya, Rwanda, Tanzania, and Uganda, it is shown that transport connectivity significantly affects firm inventory behavior. In particular, road density and transport costs to the port are important to determine the optimal inventory level. With more roads in a city and/or cheaper access to the port, firms would hold smaller inventories.en-USCC BY 3.0 IGOTOTAL REVENUEVEHICLE OPERATING COSTSTRAFFIC CONGESTIONEQUIPMENTNETWORK DATABUSINESS OPPORTUNITIESGLOBAL MARKETSMATERIALSTRANSPORT INFRASTRUCTURETRANSPORTATION COSTSRAIL LINESINFORMATIONQUALITY OF TRANSPORTELASTICITYTRAFFICHIGHWAY SYSTEMPEAK DEMANDROAD INFRASTRUCTUREINPUTSTRANSPORT SERVICESTRANSPORTATION INFRASTRUCTURETRANSPORT ACCESSCUSTOMS CLEARANCEDRIVERSOPEN ACCESSLOCAL TRANSPORTATIONTRANSPORT MODESECONOMIC ACTIVITYDEVELOPMENTINSTITUTIONSVEHICLEDATATRADE SYSTEMROADCOSTSTRANSPORT OPERATORSROAD NETWORKROAD SECTORTRANSPORTIMPACT OF TRANSPORTINVENTORY LEVELINTERSTATE HIGHWAY SYSTEMDOMAINRAILWAY NETWORKCUSTOMSRAIL LINEPRODUCTIVITYAVERAGE TRANSIT TIMECONNECTIVITYTRUEWEBMATERIALRAIL STATIONSINVENTORIESRURAL ROADSROUTEINVENTORYPHYSICAL DISTANCEFREIGHT COSTSINFRASTRUCTURELAND USETRANSACTIONSINFRASTRUCTURE INVESTMENTMANUFACTURINGTECHNOLOGYTRANSACTIONSYSTEM DEVELOPMENTCONGESTIONRELIABILITYOPPORTUNITY COSTTRANSPORTATIONINVENTORY LEVELSTRANSITINTERNATIONAL TRADESUPPLY NETWORKINFRASTRUCTURE COSTSRESULTSVALUECOMPETITIVENESSFOREIGN DIRECT INVESTMENTACCESSIBILITYDEMANDNETWORKSMOTORWAYSINFRASTRUCTURE DEVELOPMENTSDAYS OF INVENTORYPASSENGER TRAFFICOPPORTUNITY COSTSECONOMIC ORDERLEVELS OF INVENTORYRAILWAYHIGHWAYSECONOMIC THEORYSUPPLY CHAINMINISTRY OF TRANSPORTHIGHWAY INFRASTRUCTUREROAD USERROADSLOCAL ROADSRESULTHIGHWAYTRADEICTINTERSTATE HIGHWAYSRAILWAYSGOODSTHEORYBUSINESSESBUSINESSNETWORKCOMPARATIVE ADVANTAGEAGGLOMERATION ECONOMIESRAILROADSPERFORMANCEBUSINESS ENVIRONMENTRAILMARKET DEMANDECONOMIC ACTIVITIESINVESTMENTSCOMMUNICATIONSUPPLY CHAIN MANAGEMENTROAD CONDITIONSURBAN ROADSTRANSPORT COSTSCOMMUNICATION TECHNOLOGYROAD TRANSPORTVEHICLE OPERATINGURBAN TRAFFIC CONGESTIONURBAN TRAFFICHIGHWAY CAPITALFREIGHTUSESUSERBOTTLENECKSHISTORIC CITIESDEVELOPMENT POLICYWorking PaperWorld Bank10.1596/1813-9450-7280