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Distance, time, and specialization

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Author Info
Carolyn Evans
James Harrigan

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Abstract

Time is money, and distance matters. We model the interaction of these truisms, and show the implications for global specialization and trade: products where timely delivery is important will be produced near the source of final demand, where wages will be higher as a result. In the model, timely delivery is important because it allows retailers to respond to fluctuating final demand without holding costly inventories, and timely delivery is only possible from nearby locations. Using a unique dataset that allows us to measure the retail demand for timely delivery, we show that the sources of US apparel imports have shifted in the way predicted by the model, with products where timeliness matters increasingly imported from nearby countries.

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Publisher Info
Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series International Finance Discussion Papers with number 766.

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Date of creation: 2003
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Handle: RePEc:fip:fedgif:766

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Related research
Keywords: International trade ; Transportation - Fares;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hummels, David, 2001. "Time as a Trade Barrier," GTAP Working Papers 1152, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University. [Downloadable!]
  2. Stephen Redding & Anthony J. Venables, 2001. "Economic Geography and International Inequality," International Trade 0103003, EconWPA. [Downloadable!]
    Other versions:
  3. Anthony J. Venables, 2001. "Geography and International Inequalities: the Impact of New Technologies," CEP Discussion Papers dp0507, Centre for Economic Performance, LSE. [Downloadable!]
  4. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476.
  5. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932.
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dogaru, Vasile, 2005. "The general validity of comparative advantage in trade exchanges," MPRA Paper 6882, University Library of Munich, Germany. [Downloadable!]
  2. Dan Magder, 2005. "Egypt after the Multi-Fiber Arrangement: Global Apparel and Textile Supply Chains as a Route for Industrial Upgrading," Peterson Institute Working Paper Series WP05-8, Peterson Institute for International Economics. [Downloadable!]
  3. Dogaru, Vasile, 2007. "Trade Costs Algorithm in Manoilescu Generalised Scheme," MPRA Paper 6919, University Library of Munich, Germany. [Downloadable!]
  4. Prema-Chandra Athukorala, 2008. "China's integration into global production networks and its implications for export-led growth strategy in other countries in the region," Departmental Working Papers 2008-04, Australian National University, Economics RSPAS. [Downloadable!]
  5. Bas Straathof & Gert-Jan Linders & Arjan Lejour & Jan Möhlmann, 2008. "The Internal Market and the Dutch Economy," CPB Documents 168, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  6. Deborah Swenson, 2005. "Outsourcing Price Decisions: Evidence from U.S. 9802 Imports," NBER Working Papers 11184, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Berthelon, Matias & Freund, Caroline, 2004. "On the conservation of distance in international trade," Policy Research Working Paper Series 3293, The World Bank. [Downloadable!]
    Other versions:
  8. David Hummels, 2006. "The role of geography and size," INTAL Working Papers 1276, Inter-American Development Bank, INTAL. [Downloadable!]
  9. Rodolfo Helg & Lucia Tajoli, 2004. "Patterns of International Fragmentation of Production and Implications for the Labor Markets," International Trade 0405002, EconWPA. [Downloadable!]
    Other versions:
  10. Carolyn L. Evans & James Harrigan, 2004. "Tight Clothing: How the MFA Affects Asian Apparel Exports," NBER Working Papers 10250, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Deborah L. Swenson, 2004. "Overseas Assembly and Country Sourcing Choices," NBER Working Papers 10697, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  12. Prema-chandra Athukorala, 2007. "The Rise of China and East Asian Export Performance: Is the Crowding-out Fear Warranted?," Departmental Working Papers 2007-10, Australian National University, Economics RSPAS. [Downloadable!]
    Other versions:
  13. Harrigan, James & Venables, Anthony J., 2004. "Timeliness, Trade and Agglomeration," CEPR Discussion Papers 4294, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  14. Robert C. Feenstra & Barbara J. Spencer, 2005. "Contractual Versus Generic Outsourcing: The Role of Proximity," NBER Working Papers 11885, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Lewis Evans and Patrick Hughes, 2003. "Competition Policy in Small Distant Open Economies: Some Lessons from the Economics Literature," Treasury Working Paper Series 03/31, New Zealand Treasury. [Downloadable!]
  16. Rodolfo Helg, 2005. "Patterns of international fragmentation of production and the relative demand for labor," LIUC Papers in Economics 167, Cattaneo University (LIUC). [Downloadable!]
    Other versions:
  17. Céline CARRERE & Maurice SCHIFF, 2004. "On the Geography of Trade: Distance is Alive and Well," Working Papers 200423, CERDI. [Downloadable!]
    Other versions:
  18. John Whalley & Xian Xin, 2007. "Regionalization, Changes in Home Bias, and the Growth of World Trade," NBER Working Papers 13023, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  19. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2003. "Can Business and Social Networks Explain the Border Effect Puzzle?," CEPR Discussion Papers 3750, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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