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Time Zones, Outsourcing and Patterns of International Trade

Author

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  • Toru Kikuchi

    () (Kobe University)

Abstract

This paper proposes a three-country model of business services trade that captures the role of time zones in the division of labor. The connectivity of business service sectors via communications networks (e.g., the Internet) is found to determine the structure of comparative advantage. That is, two countries with connected service sectors have a comparative advantage in the good that requires business services. It is also shown that the third country inevitably specializes in the good that does not require business services.

Suggested Citation

  • Toru Kikuchi, 2006. "Time Zones, Outsourcing and Patterns of International Trade," Economics Bulletin, AccessEcon, vol. 6(15), pages 1-10.
  • Handle: RePEc:ebl:ecbull:eb-06f10018
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    File URL: http://www.accessecon.com/pubs/EB/2006/Volume6/EB-06F10018A.pdf
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    References listed on IDEAS

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    1. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    2. Toru Kikuchi, 2003. "Interconnectivity of communications networks and international trade," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 155-167, February.
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    Citations

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    Cited by:

    1. Egger, Peter H. & Larch, Mario, 2013. "Time zone differences as trade barriers," Economics Letters, Elsevier, vol. 119(2), pages 172-175.
    2. Elisabeth Christen, 2017. "Time Zones Matter: The Impact of Distance and Time Zones on Services Trade," The World Economy, Wiley Blackwell, vol. 40(3), pages 612-631, March.
    3. Kikuchi, Toru & Iwasa, Kazumichi, 2010. "A simple model of service trade with time zone differences," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 75-80, January.
    4. Noritsugu Nakanishi & Ngo Van Long, 2015. "The Distributional and Allocative Impacts of Virtual Labor Mobility across Time Zones through Communication Networks," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 638-662, August.
    5. Rebecca Tomasik, 2013. "Time zone-related continuity and synchronization effects on bilateral trade flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 321-342, June.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F1 - International Economics - - Trade

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