Comparative Advantage, Geographic Advantage and the Volume of Trade
A functional relationship between the degree of a country's comparative advantage and the volume of its net exports of any 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 deeper its exports penetrate geographically into its trading partner. The internal spatial structure of a country consists of cities on a river. It is shown that population sizes, wage rates, and residential rental rates are greatest in the port city and decline monotonically as one moves inland. Copyright 1991 by Royal Economic Society.
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Volume (Year): 101 (1991)
Issue (Month): 408 (September)
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References listed on IDEAS
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- 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.
- Deardorff, Alan V., 1979. "Weak links in the chain of comparative advantage," Journal of International Economics, Elsevier, vol. 9(2), pages 197-209, May.
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- Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977.
"Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods,"
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- 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.
- 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.
- Harry P. Bowen & Edward E. Leamer & Leo Sveikauskas, 1986. "Multicountry, Multifactor Tests of the Factor Abundance Theory," NBER Working Papers 1918, National Bureau of Economic Research, Inc.
- 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. Full references (including those not matched with items on IDEAS)
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