Why Trade Costs Matter?
Trade costs are often cited as an important determinant of the volume of trade. A growing literature has documented the negative impact of trade costs on the volume of trade. Most of these studies show that integration is the resultant of reduced costs of transportation in particular and other infrastructure services in general. Direct evidence on border costs shows that tariff barriers are now low in most countries across the world. Poor institutions and poor infrastructure penalize trade, differentially across countries. Therefore, today’s trade strategy goes beyond the traditional mechanisms of tariffs and quotas and includes “behind-the-border” issues, such as the role of infrastructure and governance in supporting a well-functioning trading economy.
|Date of creation:||Apr 2006|
|Publication status:||Published in ARTNeT website|
|Contact details of provider:|| Web page: http://www.unescap.org/tid/artnet/|
References listed on IDEAS
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- Nordås, Hildegunn Kyvik & Piermartini, Roberta, 2004. "Infrastructure and trade," WTO Staff Working Papers ERSD-2004-04, World Trade Organization (WTO), Economic Research and Statistics Division.
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NBER Chapters,in: The Regionalization of the World Economy, pages 7-32
National Bureau of Economic Research, Inc.
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- Spiros Bougheas & Panicos Demetriades & Edgar Morgenroth, 1996. "Infrastructure, Transport Costs and Trade," Keele Department of Economics Discussion Papers (1995-2001) 96/7, Department of Economics, Keele University.
- Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank. Full references (including those not matched with items on IDEAS)
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