International service transactions: Is time a trade barrier in a connected world?
AbstractThe firms' international fragmentation of production has recently widened its focus from outsourcing of intermediates to off-shoring of business services such as software program development and international call centre networks. Although a large number of business services are intangible and non-storable, gravity model estimates show that geographical distance between business partners is still relevant even when information and communication technologies (ICT) provide alternatives for face-to-face interaction. It has recently been argued that time zones can be a driving force of international service transactions by allowing for continuously operating over a 24 hours business day. In this paper, we find empirical evidence for the continuity effect in trade of business and commercial services which is even higher for trade with Non-OECD countries and robust to measurement and sample size. We show that the time zone effect in trading business services is dependent on the level of ICT infrastructure.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2011-003.
Date of creation: 05 Jan 2011
Date of revision:
international trade; business services; gravity model; distance; time zones; digital divide;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F20 - International Economics - - International Factor Movements and International Business - - - General
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.:
- Marjit, Sugata, 2007. "Trade theory and the role of time zones," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 153-160.
- Mandal, Biswajit & Marjit, Sugata & Nakanishi, Noritsugu, 2013. "Time Zones, Factor Prices and Inflow of Educational Capital: Changing Sectoral Composition," MPRA Paper 50883, University Library of Munich, Germany.
- Toru Kikuchi & Sugata Marjit & Biswajit Mandal, 2012.
"Trade with Time Zone Differences:Factor Market Implications,"
Discussion Papers Series
462, School of Economics, University of Queensland, Australia.
- Kikuchi, Toru & Marjit, Sugata, 2011. "Trade with time zone differences: factor market implications," MPRA Paper 30788, University Library of Munich, Germany.
- Kikuchi, Toru & Marjit, Sugata & Mandal, Biswajit, 2011. "Trade with Time Zone Differences: Factor Market Implications," MPRA Paper 37931, University Library of Munich, Germany, revised 2012.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Markus Pasche).
If references are entirely missing, you can add them using this form.