Theory of Comparative Advantage: Do Transportation Costs Matter?

Jacek Cukrowski, Manfred M. Fischer

    Publication: Working/Discussion PaperWU Working Paper

    Abstract

    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)
    Original languageEnglish
    Place of PublicationVienna
    PublisherWU Vienna University of Economics and Business
    Publication statusPublished - 2000

    Publication series

    NameDiscussion Papers of the Institute for Economic Geography and GIScience
    No.69/00

    WU Working Paper Series

    • Discussion Papers of the Institute for Economic Geography and GIScience

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