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Comparative Advantage, Geographic Advantage, and the Volume of Trade

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Author Info
James E. Rauch

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Abstract

A functional relationship between the degree of a country?s comparative advantage in any good and the volume of its net exports of that good to its trading partner is established using a model with per-unit-distance transportation costs between countries' coasts and their interiors. The greater a country's comparative advantage, the greater the transportation cost it can overcome and hence the deeper its exports can penetrate geographically into its trading partner. The internal spatial structure of a country is modeled using cities as the basic spatial units. It is shown that the city closest to the coast will be the largest and have the highest wage rate and residential rental rates, and that population sizes, wage rates, and residential rental rates of cities all fall as one moves inland.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3512.

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Date of creation: Nov 1990
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Publication status: published as Economic Journal, Vol. 101, pp. 1230-1244, (September 1991).
Handle: RePEc:nbr:nberwo:3512

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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. Bowen, Harry P & Leamer, Edward E & Sveikauskas, Leo, 1987. "Multicountry, Multifactor Tests of the Factor Abundance Theory," American Economic Review, American Economic Association, vol. 77(5), pages 791-809, December. [Downloadable!] (restricted)
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  2. Rauch, James E., 1989. "Increasing returns to scale and the pattern of trade," Journal of International Economics, Elsevier, vol. 26(3-4), pages 359-369, May. [Downloadable!] (restricted)
  3. Starrett, David A., 1974. "Principles of optimal location in a large homogeneous area," Journal of Economic Theory, Elsevier, vol. 9(4), pages 418-448, December. [Downloadable!] (restricted)
  4. R. Dornbusch & S. Fischer & P. A. Samuelson, 1976. "Comparative Advantage, Trade and Payments in a Ricardian Model With a Continuum of Goods," Working papers 178, Massachusetts Institute of Technology (MIT), Department of Economics.
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  5. Patricia E. Beeson & Randall W. Eberts, 1987. "Identifying amenity and productivity cities using wage and rent differentials," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 16-25. [Downloadable!]
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(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. Niebuhr, Annekatrin & Stiller, Silvia, 2002. "Integration effects in border regions - a survey of economic theory and empirical studies," ERSA conference papers ersa02p066, European Regional Science Association. [Downloadable!]
  2. James E. Rauch, 1991. "Productivity Gains From Geographic Concentration of human Capital: Evidence From the Cities," NBER Working Papers 3905, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Gordon H. Hanson, 1998. "North American Economic Integration and Industry Location," NBER Working Papers 6587, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Barjak, Franz & Heimpold, Gerhard, 1999. "Development Problems and Policies at the German Border with Poland," ERSA conference papers ersa99pa136, European Regional Science Association. [Downloadable!]
  5. Olga Alonso Villar, . "El analisis economico de los procesos de urbanizacion," Documentos de trabajo - Análise Económica 0004, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia. [Downloadable!]
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