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Theory of Comparative Advantage: Do Transportation Costs Matter?

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  • Jacek Cukrowski
  • Manfred M. Fischer

Abstract

In this paper we present a formal analysis that incorporates returns to transportation into a Ricardian framework to predict trade patterns. The important point 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. Copyright 2000 Blackwell Publishers

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Regional Science.

Volume (Year): 40 (2000)
Issue (Month): 2 ()
Pages: 311-322

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Handle: RePEc:bla:jregsc:v:40:y:2000:i:2:p:311-322

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Cited by:
  1. Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2005. "Market imperfections in a spatial economy: some experimental results," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 476-496, May.
  2. Hanjoon M. Jung & Abid A Burki & Mushtaq A Khan, 2012. "Supply of Dairy Products in Developing Countries," Economics Bulletin, AccessEcon, vol. 32(4), pages 3213-3223.
  3. David Meintrup & Chang Woon Nam, 2006. "Shadow Market Area for Air Pollutants," ERSA conference papers ersa06p412, European Regional Science Association.
  4. Patrick Lehner & Gunther Maier, 2001. "Does space finally matter? The Position of New Economic Geography in Economic Journals," ERSA conference papers ersa01p67, European Regional Science Association.
  5. Eduardo Haddad & Fernando Perobelli, 2005. "Trade Liberalization and Regional Inequality - Do Transportation Costs Impose a Spatial Poverty Trap?," ERSA conference papers ersa05p700, European Regional Science Association.
  6. World Bank, 2008. "Brazil : Evaluating the Macroeconomic and Distributional Impacts of Lowering Transportation Costs," World Bank Other Operational Studies 8083, The World Bank.
  7. Alexandre Skiba, 2007. "Regional Economies of Scale in Transportation and Regional Welfare," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 200705, University of Kansas, Department of Economics, revised Sep 2007.
  8. Eduardo A. Haddad & Geoffrey J.D. Hewings, 2004. "Transportation Costs, Increasing Returns and Regional growth: An Interregional CGE Analysis," Working papers - Textos para Discussao do Departamento de Economia da Universidade de Brasilia 315, Departamento de Economia da Universidade de Brasilia.
  9. Jung, Hanjoon Michael, 2011. "A Simple Model of Dairy Product Supply," MPRA Paper 29653, University Library of Munich, Germany.

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