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Interconnectivity of communications networks and international trade


  • Toru Kikuchi


In this study a multi-country model of trade is developed that captures the role of country-specific communications network interconnectivity, which enhances trade in intermediate business services. The number of countries connected to internationally interconnected networks is found to determine the structure of comparative advantage. That is, countries with interconnected networks have a comparative advantage in the good that requires business services provided via networks. In connected countries, producers of that good benefit from the efficient transmission of business services. This research also demonstrates that countries whose country-specific networks are not connected to the interconnected networks may become worse off as the result of trade.

Suggested Citation

  • Toru Kikuchi, 2003. "Interconnectivity of communications networks and international trade," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 155-167, February.
  • Handle: RePEc:cje:issued:v:36:y:2003:i:1:p:155-167

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    References listed on IDEAS

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    9. John Beghin & David Roland-Holst & Dominique van der Mensbrugghe, 1997. "Trade and Pollution Linkages: Piecemeal Reform and Optimal Intervention," Canadian Journal of Economics, Canadian Economics Association, vol. 30(2), pages 442-455, May.
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    Cited by:

    1. repec:ebl:ecbull:v:6:y:2006:i:15:p:1-10 is not listed on IDEAS
    2. Toru Kikuchi, 2007. "Network Externalities And Comparative Advantage," Bulletin of Economic Research, Wiley Blackwell, vol. 59(4), pages 327-337, October.
    3. Nguyen HIEP & Hiroshi OHTA, 2005. "Heterogeneity, Networks and International Trade under Monopolistic Competition," GSICS Working Paper Series 1, Graduate School of International Cooperation Studies, Kobe University.
    4. Jeon, Bang Nam & Tang, Linghui, 2005. "Information Technology and Bilateral FDI: Theory and Evidence," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 613-630.
    5. repec:ebl:ecbull:v:6:y:2005:i:7:p:1-9 is not listed on IDEAS
    6. Kikuchi, Toru, 2005. "On the enlargement of interconnected communications networks in the world economy," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(1), pages 18-27, February.
    7. Kikuchi, Toru & Long, Ngo Van, 2010. "A simple model of service offshoring with time zone differences," The North American Journal of Economics and Finance, Elsevier, vol. 21(3), pages 217-227, December.
    8. Jorge Ferrando & Jean J. Gabszewicz & Didier Laussel & Nathalie Sonnac, 2008. "Intermarket network externalities and competition: An application to the media industry," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(3), pages 357-379.
    9. repec:ebl:ecbull:v:6:y:2007:i:4:p:1-7 is not listed on IDEAS
    10. Iwasa, Kazumichi & Kikuchi, Toru, 2008. "Software Provision and the Impact of Market Integration: A Note," MPRA Paper 9315, University Library of Munich, Germany.
    11. Toru Kikuchi, 2006. "Time Zones, Outsourcing and Patterns of International Trade," Economics Bulletin, AccessEcon, vol. 6(15), pages 1-10.

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation


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