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Theory of Comparative Advantage: Do Transportation Costs Matter?

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  • Jacek Cukrowski
  • Manfred M. Fischer

Abstract

In this paper we present a formal analysis that incorporates returns to transportation into a Ricardian framework to predict trade patterns. The important point gained from this analysis is that increasing returns to transportation, coupled with appropriate distances between trading partners, can be shown to reverse Ricardian predictions even when there are no international differences in tastes, technology, or factor endowments. Additional gains from trade may emerge from reductions in aggregate delivery costs owing to scale economies. Copyright 2000 Blackwell Publishers

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  • Jacek Cukrowski & Manfred M. Fischer, 2000. "Theory of Comparative Advantage: Do Transportation Costs Matter?," Journal of Regional Science, Wiley Blackwell, vol. 40(2), pages 311-322.
  • Handle: RePEc:bla:jregsc:v:40:y:2000:i:2:p:311-322
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    Cited by:

    1. Gunther Maier & Patrick Lehner, 2002. "Does space finally matter? The position of New Economic Geography in Economic Journals," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2002(1).
    2. Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2005. "Market imperfections in a spatial economy: some experimental results," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 476-496, May.
    3. repec:wiw:wus009:6099 is not listed on IDEAS
    4. Hanjoon M. Jung & Abid A Burki & Mushtaq A Khan, 2012. "Supply of Dairy Products in Developing Countries," Economics Bulletin, AccessEcon, vol. 32(4), pages 3213-3223.
    5. Eduardo Amaral Haddad & Fernando Salgueiro Perobelli, 2004. "Trade Liberalization And Regional Inequality: Do Transportation Costs Impose A Spatial Poverty Trap?," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] 131, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    6. David Meintrup & Chang Woon Nam, 2009. "Shadow market area for air pollutants," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 36(4), pages 664-681, July.
    7. Timothy C. Ford & Brian Logan & Jennifer Logan, 2009. "NAFTA or Nada? Trade's Impact on U.S. Border Retailers," Growth and Change, Wiley Blackwell, vol. 40(2), pages 260-286.
    8. Eduardo Haddad & Geoffrey Hewings, 2004. "Transportation Costs, Increasing Returns and Regional Growth: An Interregional CGE Analysis," ERSA conference papers ersa04p461, European Regional Science Association.
    9. Alexandre Skiba, 2007. "Regional Economies of Scale in Transportation and Regional Welfare," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 200705, University of Kansas, Department of Economics, revised Sep 2007.
    10. Jung, Hanjoon Michael, 2011. "A Simple Model of Dairy Product Supply," MPRA Paper 29653, University Library of Munich, Germany.
    11. World Bank, 2008. "Brazil : Evaluating the Macroeconomic and Distributional Impacts of Lowering Transportation Costs," World Bank Other Operational Studies 8083, The World Bank.

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