IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/3512.html
   My bibliography  Save this paper

Comparative Advantage, Geographic Advantage, and the Volume of Trade

Author

Listed:
  • James E. Rauch

Abstract

A functional relationship between the degree of a country?s comparative advantage in any good and the volume of its net exports of that 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 greater the transportation cost it can overcome and hence the deeper its exports can penetrate geographically into its trading partner. The internal spatial structure of a country is modeled using cities as the basic spatial units. It is shown that the city closest to the coast will be the largest and have the highest wage rate and residential rental rates, and that population sizes, wage rates, and residential rental rates of cities all fall as one moves inland.

Suggested Citation

  • James E. Rauch, 1990. "Comparative Advantage, Geographic Advantage, and the Volume of Trade," NBER Working Papers 3512, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3512
    Note: ITI IFM
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w3512.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Deardorff, Alan V., 1979. "Weak links in the chain of comparative advantage," Journal of International Economics, Elsevier, vol. 9(2), pages 197-209, May.
    2. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, vol. 67(5), pages 823-839, December.
    3. 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.
    4. Patricia E. Beeson & Randall W. Eberts, 1987. "Identifying amenity and productivity cities using wage and rent differentials," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 16-25.
    5. 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.
    6. 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)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cem Karayalcin & Hakan Yilmazkuday, 2015. "Trade and Cities," World Bank Economic Review, World Bank Group, vol. 29(3), pages 523-549.
    2. Lefteris Topaloglou & George Petrakos, 2006. "The New Economic Geography of the Northern Greek Border Regions," ERSA conference papers ersa06p456, European Regional Science Association.
    3. Niebuhr, Annekatrin & Stiller, Silvia, 2002. "Integration effects in border regions : a survey of economic theory and empirical studies," HWWA Discussion Papers 179, Hamburg Institute of International Economics (HWWA).
    4. Takahashi, Takaaki, 2003. "International trade and inefficiency in the location of production," Journal of the Japanese and International Economies, Elsevier, vol. 17(2), pages 134-152, June.
    5. Zhang, Wei-Bin, 1997. "A two-region model with endogenous capital and knowledge--locational amenities and preferences," International Review of Economics & Finance, Elsevier, vol. 6(1), pages 1-16.
    6. Mayer, Thierry, 2000. "Spatial Cournot competition and heterogeneous production costs across locations," Regional Science and Urban Economics, Elsevier, vol. 30(3), pages 325-352, May.
    7. Hanson, Gordon H., 1998. "Regional adjustment to trade liberalization," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 419-444, July.
    8. Carolina Guevara, 2015. "The effect of trade on agglomeration within regions," Working Papers 1530, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    9. Redding, Stephen J., 2016. "Goods trade, factor mobility and welfare," Journal of International Economics, Elsevier, vol. 101(C), pages 148-167.
    10. Kandogan, Yener, 2014. "The effect of foreign trade and investment liberalization on spatial concentration of economic activity," International Business Review, Elsevier, vol. 23(3), pages 648-659.
    11. A. Kerem Co?ar & Pablo D. Fajgelbaum, 2016. "Internal Geography, International Trade, and Regional Specialization," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 24-56, February.
    12. Hanson, Gordon H, 1998. "North American Economic Integration and Industry Location," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 30-44, Summer.
    13. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
    14. Ezcurra, Roberto & Rodríguez-Pose, Andrés, 2013. "Does Economic Globalization affect Regional Inequality? A Cross-country Analysis," World Development, Elsevier, vol. 52(C), pages 92-103.
    15. Wassmann, Pia, 2016. "The Economic Effects of the EU Eastern Enlargement on Border Regions in the Old Member States," Hannover Economic Papers (HEP) dp-582, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    16. Dimitris Kallioras & George Petrakos & Maria Tsiapa & Lefteris Topaloglou, 2011. "The Determinants of Growth in EU Border Regions," ERSA conference papers ersa10p702, European Regional Science Association.
    17. Akhter, Syed H., 2004. "Is globalization what it's cracked up to be? Economic freedom, corruption, and human development," Journal of World Business, Elsevier, vol. 39(3), pages 283-295, August.
    18. Olga Alonso-Villar, 2001. "Large Metropolises in the Third World: An Explanation," Urban Studies, Urban Studies Journal Limited, vol. 38(8), pages 1359-1371, July.
    19. Marius Brülhart, 2011. "The spatial effects of trade openness: a survey," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(1), pages 59-83, April.
    20. Barjak, Franz & Heimpold, Gerhard, 1999. "Development Problems and Policies at the German Border with Poland," ERSA conference papers ersa99pa136, European Regional Science Association.
    21. Leamer, Edward E. & Levinsohn, James, 1995. "International trade theory: The evidence," Handbook of International Economics,in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 26, pages 1339-1394 Elsevier.
    22. Carolina Guevara, 2015. "The effect of trade on agglomeration within regions," Working Papers halshs-01233389, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3512. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () or (Joanne Lustig). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.