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Scale Economies and International Trade in a Rapidly Growing Region

Author

Listed:
  • L. David, Byron

    (The City College of New York)

  • H. Kellman, Mitchell

    (The City College of New York)

Abstract

Scale is universally acknowledged as important in the determination of national comparative advantage. Paradoxically, attempts to associate empiri - cal measures of scale economies and international trade volume have proved largely inconclusive, and often have been found to sport the “wrong” sign. We examine the trade-scale nexus in the context of East Asian NICs and “Next- Tier” NICs whose economies and exports have grown especially rapidly since the mid-1960s. In a cross section context we replicate the negative correlations typically found in the literature. By combining time section and cross section analyses we demonstrate significant positive correlations in a dynamic context, finding that the smaller the country the greater the scale economy gains for any given population increase.

Suggested Citation

  • L. David, Byron & H. Kellman, Mitchell, 1997. "Scale Economies and International Trade in a Rapidly Growing Region," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 26-46.
    • Handle: RePEc:ris:integr:0037
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    Citations

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    Cited by:

    1. Ross D. Weiner & Trevor Roxo & Mitchell Kellman, 2008. "South Africa's Manufactured International Trade in the Post-Sanctions Epoch: Patterns and Potentials," The American Economist, Sage Publications, vol. 52(1), pages 86-95, March.

    More about this item

    Keywords

    Scale; Economies;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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