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Why Do Trade Costs Vary?

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  • Richard Pomfret

    ()
    (School of Economics, University of Adelaide)

  • Patricia Sourdin

    ()
    (School of Economics, University of Adelaide)

Abstract

Trade theorists and policymakers have until recently ignored trade costs, but as tariffs have fallen it is apparent that trade costs are a significant obstacle to trade and they are not simply determined by geography or commodity characteristics. We analyse country-by-country variations in trade costs using disaggregated Australian import data. In Australia average trade costs are about 5% of the value of imports, compared to an average tariff of under 4%. Controlling for distance from Australia and the bulkiness of commodities, the paper examines other determinants of international trade costs in terms of exporting country characteristics. Country-specific characteristics which influence the size of trade costs may provide a direct link between institutions and economic growth.

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Bibliographic Info

Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2008-08.

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Length: 40 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:adl:wpaper:2008-08

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Citations

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Cited by:
  1. Nicholas Li & Gee Hee Hong, 2013. "Market Structure and Cost Pass-Through in Retail," Working Papers tecipa-470, University of Toronto, Department of Economics.
  2. Joern Kleinert & Julia Spies, 2011. "Endogenous Transport Costs in International Trade," IAW Discussion Papers 74, Institut für Angewandte Wirtschaftsforschung (IAW).
  3. Logan Lewis, 2013. "Menu Costs, Trade Flows, and Exchange Rate Volatility," 2013 Meeting Papers 313, Society for Economic Dynamics.
  4. Daniel Yi Xu, 2013. "Competition, Markups, and the Gains from International Trade," 2013 Meeting Papers 653, Society for Economic Dynamics.
  5. Julia Spies & Joern Kleinert, 2011. "Transport Costs in International Trade," ERSA conference papers ersa11p625, European Regional Science Association.
  6. Oleg Itskhoki & Gita Gopinath, 2010. "In Search of Real Rigidities," 2010 Meeting Papers 1337, Society for Economic Dynamics.
  7. Georgios Gerasimou, 2013. "A Behavioural Model of Choice in the Presence of Decision Conflict," Discussion Paper Series, Department of Economics 201302, Department of Economics, University of St. Andrews.
  8. Amiti, Mary & Itskhoki, Oleg & Konings, Jozef, 2012. "Importers, Exporters, and Exchange Rate Disconnect," CEPR Discussion Papers 9260, C.E.P.R. Discussion Papers.
  9. Bianka Dettmer & Andreas Freytag & Peter Draper, 2013. "Check-in, departure and arrival times: Air cargo in Southern Africa?," Jena Economic Research Papers 2013-018, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  10. Pomfret, Richard & Sourdin, Patricia, 2009. "Have Asian trade agreements reduced trade costs?," Journal of Asian Economics, Elsevier, vol. 20(3), pages 255-268, May.
  11. Richard Pomfret & Patricia Sourdin, 2010. "Trade Facilitation And The Measurement Of Trade Costs," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 145-163.
  12. Gee Hee Hong & Nicholas Li, 2013. "Market Structure and Cost Pass-Through in Retail," Working Papers 13-5, Bank of Canada.
  13. Yuko Imura, 2013. "Endogenous Trade Participation with Incomplete Exchange Rate Pass-Through," Working Papers 13-30, Bank of Canada.
  14. Murat Genç & David Law, 2014. "A Gravity Model of Barriers to Trade in New Zealand," Treasury Working Paper Series 14/05, New Zealand Treasury.

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