Endogenous transport costs and international trade
نویسندگان
چکیده
In this paper, we model a manufacturing and transport sector use export volumes to determine the demand for services. If trade exceeds particular level, service suppliers maximise profit by investing in an advanced technology, which lowers their marginal costs reduces equilibrium prices. Transport thus vary according two characteristics: distance between locations endogenous firm decision invest transportation. A simulation exercise reveals that ignoring effect of investment on biases empirical results. We apply insight our estimations rely repeatedly collected price data from United Parcel Service. instrumental variable estimator account endogeneity decision. Our estimation results confirm prices are influenced both level exports countries. find trading partners with 10% more enjoy average 0.6% lower
منابع مشابه
Beyond Trade Costs: Firms’ Endogenous Access to International Markets
In this paper we argue that the level of access to international markets by firms is related not only to exogenous factors such as trade costs, but also with endogenous factors such as strategic competition on R&D. In particular, we show that: (1) higher efficiency of R&D (like low trade costs) makes trade more easy for firms (given that R&D increases the profitability of exports); (2) firms wi...
متن کاملEndogenous Labor Supply and International Trade
It is assumed in new trade theory and new economic geography that the supply of labor is fixed, which is not true in real labor markets. We develop a model of new trade theory by incorporating an elastic labor supply and analyze the impacts of technological progress on the equilibrium outcomes of working hours and economic welfare. We first show that the labor supply curve is backward bending. ...
متن کاملEndogenous Labor Supply and International Trade
It is assumed in new trade theory and new economic geography that the supply of labor is fixed, which is not true in real labor markets. We develop a model of new trade theory by incorporating an elastic labor supply and analyze the impacts of technological progress on the equilibrium outcomes of working hours and economic welfare. We first show that the labor supply curve is backward bending. ...
متن کاملInformation Costs and Networks in International Trade
This paper discusses the impact of information costs on the organisation of international trade. The conditions under which trade is organized through an information intermediary, the incentives for network building and the implications for trade volumes are analysed using a stylised model. The model illustrates how information barriers can affect the way trade is organised. The model shows how...
متن کاملTransport Costs and North-South Trade
We develop a simple two country model of international trade that assumes that there is a fixed cost associated with transporting goods across national boundaries. We show that this leads to multiple equilibria that can be Pareto-ranked. One of these equilibria is autarky. We argue that the existence of fixed costs in transport can help explain the low volume of North-South trade. ∗GREQAM, Univ...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: The World Economy
سال: 2022
ISSN: ['1467-9701', '0378-5920']
DOI: https://doi.org/10.1111/twec.13337