Theory of Comparative Advantage: Do Transportation Costs Matter?

Cukrowski, Jacek and Fischer, Manfred M. (2000) Theory of Comparative Advantage: Do Transportation Costs Matter? Discussion Papers of the Institute for Economic Geography and GIScience, 69/00. WU Vienna University of Economics and Business, Vienna.


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The paper presents a formal analysis which incorporates returns to transportation into a Ricardian framework to predict trade patterns. The important point to be gained from this analysis is that increasing returns to transportation, coupled with appropriate distances between trading partners can be shown to reverse Ricardian predictions even when there are no international differences in tastes, technology, or factor endowments. Additional gains from trade may emerge from reductions in aggregate delivery costs owing to scale economies. (authors' abstract)

Item Type: Paper
Keywords: Comparative advantage / Ricardian model / transportation costs / increasing returns / reasons for trade
Classification Codes: JEL F010, F100, R100
Divisions: Departments > Sozioökonomie > Wirtschaftsgeographie und Geoinformatik > Fischer
Depositing User: ePub Administrator
Date Deposited: 08 Jul 2014 13:24
Last Modified: 13 Nov 2014 08:29


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