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Time zone differences as trade barriers

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  • Egger, Peter H.
  • Larch, Mario

Abstract

This paper estimates the impact of time zone differences between trading locations on trade costs and trade in general equilibrium. Using homogeneous bilateral trade data between US states and Canadian provinces, time zone differences are found to reduce bilateral trade by 11% on average, which amounts to about one-sixth of the international border effect between the US and Canada.

Suggested Citation

  • Egger, Peter H. & Larch, Mario, 2013. "Time zone differences as trade barriers," Economics Letters, Elsevier, vol. 119(2), pages 172-175.
    • Handle: RePEc:eee:ecolet:v:119:y:2013:i:2:p:172-175
    DOI: 10.1016/j.econlet.2013.02.016
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    References listed on IDEAS

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    1. Stein, Ernesto & Daude, Christian, 2007. "Longitude matters: Time zones and the location of foreign direct investment," Journal of International Economics, Elsevier, vol. 71(1), pages 96-112, March.
    2. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    3. Bianka Dettmer, 2014. "International Service Transactions: Is Time a Trade Barrier in a Connected World?," International Economic Journal, Taylor & Francis Journals, vol. 28(2), pages 225-254, June.
    4. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
    5. repec:ebl:ecbull:v:6:y:2006:i:15:p:1-10 is not listed on IDEAS
    6. Toru Kikuchi, 2006. "Time Zones, Outsourcing and Patterns of International Trade," Economics Bulletin, AccessEcon, vol. 6(15), pages 1-10.
    7. 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.
    8. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
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    Citations

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    Cited by:

    1. Arundhati Sinha Roy & Anwesha Aditya & Siddhartha Chattopadhyay & Sugata Marjit, 2024. "Comparative Advantage in the 24/7 Economy: Time-Zone Differences and Service Trade Flows," CESifo Working Paper Series 11290, CESifo.
    2. Karl Benediktsson & Stanley D. Brunn, 2015. "Time Zone Politics and Challenges of Globalisation," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 106(3), pages 276-290, July.
    3. Mandal, Biswajit, 2024. "Digital Mobility of Financial Capital Across Different Time Zones, Factor Prices and Sectoral Composition," GLO Discussion Paper Series 1371, Global Labor Organization (GLO).
    4. Manchin, Miriam, 2025. "Collaboration across the globe: Time zone differences and citations," Research Policy, Elsevier, vol. 54(8).
    5. Das, Maitrayee & Mandal, Biswajit, 2025. "Distance related time zone difference, waiting time, trade, and Dutch disease," Research in Economics, Elsevier, vol. 79(4).
    6. Rishav Bista & Erik Figueiredo & Brandon Sheridan, 2019. "Heterogeneous time zone effects and exports," Economics Bulletin, AccessEcon, vol. 39(2), pages 1039-1046.
    7. Brei, Michael & von Peter, Goetz, 2018. "The distance effect in banking and trade," Journal of International Money and Finance, Elsevier, vol. 81(C), pages 116-137.
    8. Joachim Wagner, 2019. "Time zones and German exports: first evidence from firm-product level data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(1), pages 181-198, February.
    9. Eric Jonathon Osborne‐Christenson, 2022. "Saving light, losing lives: How daylight saving time impacts deaths from suicide and substance abuse," Health Economics, John Wiley & Sons, Ltd., vol. 31(S2), pages 40-68, October.
    10. 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.

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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