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Customs-Related Transaction Costs, Firm Size and International Trade Intensity

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  • Verwaal, Ernst
  • Donkers, Bas

Abstract

Customs are generally perceived as a time-consuming impediment to international trade. However, few studies have empirically examined the determinants and the impact of this type of government-imposed transaction costs. This paper analyses the role of firm size as a determinant of customs-related transaction costs, as well as the effect of firm size on the relationship between these costs and the international trade intensity of firms. The results of this study indicate that customs-related transaction costs repress international trade activities of firms, even at low levels of these costs. The paper identifies transaction-related economies of scale, simplified customs procedures and advanced information and communication technology as main determinants of customs-related transaction costs. It is shown that when these factors are taken into account, firm size has no effect on customs-related transaction costs. Policy implications are considered for firm strategy and public policy. Copyright 2003 by Kluwer Academic Publishers

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Bibliographic Info

Article provided by Springer in its journal Small Business Economics.

Volume (Year): 21 (2003)
Issue (Month): 3 (November)
Pages: 257-71

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Handle: RePEc:kap:sbusec:v:21:y:2003:i:3:p:257-71

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Web page: http://www.springerlink.com/link.asp?id=100338

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  1. Nooteboom, B., 1993. "Firm size effects on transaction costs," Open Access publications from Tilburg University urn:nbn:nl:ui:12-376115, Tilburg University.
  2. Leonidas C Leonidou & Constatine S Katsikeas, 1996. "The Export Development Process: An Integrative Review of Empirical Models," Journal of International Business Studies, Palgrave Macmillan, vol. 27(3), pages 517-551, September.
  3. Marsha Blumenthal & Joel Slemrod, 1995. "The compliance cost of taxing foreign-source income: Its magnitude, determinants, and policy implications," International Tax and Public Finance, Springer, vol. 2(1), pages 37-53, February.
  4. Cedric Sandford, 1981. "Book Review: Costs and Benefits of VAT," Fiscal Studies, Institute for Fiscal Studies, vol. 2(2), pages 61-62, July.
  5. Lenn Gomes & Kannan Ramaswamy, 1999. "An Empirical Examination of the Form of the Relationship Between Multinationality and Performance," Journal of International Business Studies, Palgrave Macmillan, vol. 30(1), pages 173-187, March.
  6. Jonathan L Calof, 1994. "The Relationship Between Firm Size and Export Behavior Revisited," Journal of International Business Studies, Palgrave Macmillan, vol. 25(2), pages 367-387, June.
  7. Andrea Bonaccorsi, 1992. "On the Relationship Between Firm Size and Export Intensity," Journal of International Business Studies, Palgrave Macmillan, vol. 23(4), pages 605-635, December.
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Cited by:
  1. Peter Walkenhorst & Tadashi Yasui, 2004. "Quantitative Assessment of the Benefits of Trade Facilitation," International Trade 0401008, EconWPA.
  2. Mario Holzner & Florin Peci, 2012. "The impact of customs procedures on business performance: evidence from Kosovo," wiiw Balkan Observatory Working Papers 97, The Vienna Institute for International Economic Studies, wiiw.
  3. Roberto Miranda, 2012. "Central American Economic Integration - The Impact of a Customs Union with Guatemala on El Salvador’s Economy," Competence Centre on Money, Trade, Finance and Development 1208, Hochschule fuer Technik und Wirtschaft, Berlin.
  4. Yang, Jie, 2014. "Supply chain agility: Securing performance for Chinese manufacturers," International Journal of Production Economics, Elsevier, vol. 150(C), pages 104-113.

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