Congestible communications networks and international trade
AbstractWe build a two-country model of monopolistic competition with communications networks. A communications network is characterized by (1) the existence of large fixed costs of network provision, and (2) the presence of congestion. It is demonstrated that both the size of a country and the relative magnitude of the congestion effect determine its comparative advantage: if the congestion effect (resp., the cost-sharing effect) prevails universally, a comparative advantage in the goods that require communications is held by the smaller (resp., larger) of the two countries.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 35 (2002)
Issue (Month): 2 (May)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
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- Jeon, Bang Nam & Tang, Linghui, 2005.
"Information Technology and Bilateral FDI: Theory and Evidence,"
Journal of Economic Integration,
Center for Economic Integration, Sejong University, vol. 20, pages 613-630.
- Jeon, Bang Nam & Tang, Linghui & Zhu, Lei, 2012. "Information Technology and Bilateral FDI: Theory and Evidence," MPRA Paper 36628, University Library of Munich, Germany.
- Colin Davis, 2005. "Capital-Intensive Country-Specific Network Costs and Intra-Industry Trade," Economics Bulletin, AccessEcon, vol. 6(3), pages 1-9.
- repec:ebl:ecbull:v:15:y:2007:i:5:p:1-9 is not listed on IDEAS
- Colin Davis, 2007. "Communication costs, network externalities, and long-run growth," Economics Bulletin, AccessEcon, vol. 15(5), pages 1-9.
- Ashok S Guha & Brishti Guha, 2008. "Trade, Growth and Increasing Returns to Infrastructure : The Role of the Sophisticated Monopolist," Trade Working Papers 22432, East Asian Bureau of Economic Research.
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