Assessing the Impact of Communication Costs on International Trade
Recent research suggests that trade costs influence the pattern of specialization and trade, but there is limited empirical research on the determinants of trade costs. The existing literature identifies a range of barriers that separate nations, b...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2002/11/2079746/assessing-impact-communication-costs-international-trade http://hdl.handle.net/10986/19205 |
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okr-10986-19205 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
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English en_US |
| topic |
ABSOLUTE VALUE AGGREGATE TRADE AGGREGATE TRADE FLOWS ARBITRAGE BILATERAL TARIFF BILATERAL TARIFFS BILATERAL TRADE CHANGES IN TRADE CIF COMMODITIES COMMODITY COMMUNICATION COSTS COMMUNICATION INFRASTRUCTURE COMMUNICATION NETWORKS COMMUNICATIONS COSTS CONSUMER PREFERENCES CONSUMERS CONSUMPTION LEVELS CUSTOMS DATA SOURCES DEMAND ELASTICITIES DOMESTIC PRODUCTS ECONOMETRIC MODELS ECONOMIC GEOGRAPHY ECONOMIC THEORY ECONOMIES OF SCALE ECONOMISTS ELASTICITY ELASTICITY OF SUBSTITUTION ELASTICITY OF TRADE EMPIRICAL ANALYSIS EMPIRICAL RESEARCH ENDOGENOUS VARIABLES EXCHANGE RATES EXOGENOUS VARIABLES EXPORTERS EXPORTS FACTOR ENDOWMENTS FINAL GOODS FIXED COSTS FOREIGN DIRECT INVESTMENT FORMAL ANALYSIS FREIGHT GDP GLOBAL TRADE GRAVITY EQUATION GRAVITY FRAMEWORK GRAVITY MODEL IMPERFECT SUBSTITUTES IMPORT TARIFF IMPORT TARIFFS IMPORTS INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INSURANCE INTERNATIONAL PRODUCTION INTERNATIONAL TELECOMMUNICATIONS INTERNATIONAL TRADE INTERNATIONAL TRANSPORT LABOR COSTS MACROECONOMICS MARGINAL COSTS MEASURE OF TRADE MONOPOLIES MONOPOLISTIC COMPETITION PATTERN OF SPECIALIZATION PATTERN OF TRADE PRODUCERS PRODUCT DIFFERENTIATION PRODUCTION PROCESSES SUBSTITUTION ELASTICITIES SUNK COSTS TARIFF BARRIERS TARIFF DATA TECHNOLOGICAL PROGRESS TELECOM INFRASTRUCTURE TELECOMMUNICATION TELECOMMUNICATIONS TELECOMMUNICATIONS OPERATORS TELECOMMUNICATIONS POLICY TRADE COSTS TRADE DATA TRADE FLOWS TRADE MODELS TRADE PATTERNS TRADE PERFORMANCE TRADE PREFERENCES TRADE THEORIES TRADE VALUES TRAFFIC TRANSPORT COSTS UTILITY FUNCTION VALUE OF EXPORTS VALUE OF TRADE VARIABLE COSTS |
| spellingShingle |
ABSOLUTE VALUE AGGREGATE TRADE AGGREGATE TRADE FLOWS ARBITRAGE BILATERAL TARIFF BILATERAL TARIFFS BILATERAL TRADE CHANGES IN TRADE CIF COMMODITIES COMMODITY COMMUNICATION COSTS COMMUNICATION INFRASTRUCTURE COMMUNICATION NETWORKS COMMUNICATIONS COSTS CONSUMER PREFERENCES CONSUMERS CONSUMPTION LEVELS CUSTOMS DATA SOURCES DEMAND ELASTICITIES DOMESTIC PRODUCTS ECONOMETRIC MODELS ECONOMIC GEOGRAPHY ECONOMIC THEORY ECONOMIES OF SCALE ECONOMISTS ELASTICITY ELASTICITY OF SUBSTITUTION ELASTICITY OF TRADE EMPIRICAL ANALYSIS EMPIRICAL RESEARCH ENDOGENOUS VARIABLES EXCHANGE RATES EXOGENOUS VARIABLES EXPORTERS EXPORTS FACTOR ENDOWMENTS FINAL GOODS FIXED COSTS FOREIGN DIRECT INVESTMENT FORMAL ANALYSIS FREIGHT GDP GLOBAL TRADE GRAVITY EQUATION GRAVITY FRAMEWORK GRAVITY MODEL IMPERFECT SUBSTITUTES IMPORT TARIFF IMPORT TARIFFS IMPORTS INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INSURANCE INTERNATIONAL PRODUCTION INTERNATIONAL TELECOMMUNICATIONS INTERNATIONAL TRADE INTERNATIONAL TRANSPORT LABOR COSTS MACROECONOMICS MARGINAL COSTS MEASURE OF TRADE MONOPOLIES MONOPOLISTIC COMPETITION PATTERN OF SPECIALIZATION PATTERN OF TRADE PRODUCERS PRODUCT DIFFERENTIATION PRODUCTION PROCESSES SUBSTITUTION ELASTICITIES SUNK COSTS TARIFF BARRIERS TARIFF DATA TECHNOLOGICAL PROGRESS TELECOM INFRASTRUCTURE TELECOMMUNICATION TELECOMMUNICATIONS TELECOMMUNICATIONS OPERATORS TELECOMMUNICATIONS POLICY TRADE COSTS TRADE DATA TRADE FLOWS TRADE MODELS TRADE PATTERNS TRADE PERFORMANCE TRADE PREFERENCES TRADE THEORIES TRADE VALUES TRAFFIC TRANSPORT COSTS UTILITY FUNCTION VALUE OF EXPORTS VALUE OF TRADE VARIABLE COSTS Fink, Carsten Mattoo, Aaditya Neagu, Ileana Cristina Assessing the Impact of Communication Costs on International Trade |
| relation |
Policy Research Working Paper;No. 2929 |
| description |
Recent research suggests that trade
costs influence the pattern of specialization and trade, but
there is limited empirical research on the determinants of
trade costs. The existing literature identifies a range of
barriers that separate nations, but then typically focuses
only on transport costs. Although communication costs figure
prominently in intuitive explanations and casual
observations, they have played little role in the formal
analysis of trade costs. The authors seek to examine whether
this neglect matters, and whether the inclusion of the
magnitude and variation of communication costs across
partner countries can add value to existing explanations of
the pattern of trade. The authors develop a simple
multi-sector model of "impeded" trade that
generates hypotheses in a gravity-type estimation framework.
The main proxies for bilateral communication costs are the
per-minute country-to-country calling prices charged in the
importing and exporting countries. The use of bilateral
variations in prices yields estimates that are superior to
the ones obtained from country-specific measures of
communication infrastructure used in previous studies. The
authors find that international variations in communication
costs have a significant influence on bilateral trade flows,
at the aggregate level and for most individual sectors
disaggregated according to the 2-digit SITC classification.
Since information and communication needs are likely to be
much greater for differentiated goods, the authors test
whether trade in these products is more sensitive to
variations in the costs of communication. Using the Rauch
classification of product heterogeneity, the estimates
suggest that the impact of communication costs on trade in
differentiated products is as much as one-third larger than
on trade in homogenous products. Finally, the authors
verify, to the extent possible, that the significance of
communication costs is not driven by their endogeneity or by
omitted variables. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Fink, Carsten Mattoo, Aaditya Neagu, Ileana Cristina |
| author_facet |
Fink, Carsten Mattoo, Aaditya Neagu, Ileana Cristina |
| author_sort |
Fink, Carsten |
| title |
Assessing the Impact of Communication Costs on International Trade |
| title_short |
Assessing the Impact of Communication Costs on International Trade |
| title_full |
Assessing the Impact of Communication Costs on International Trade |
| title_fullStr |
Assessing the Impact of Communication Costs on International Trade |
| title_full_unstemmed |
Assessing the Impact of Communication Costs on International Trade |
| title_sort |
assessing the impact of communication costs on international trade |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2002/11/2079746/assessing-impact-communication-costs-international-trade http://hdl.handle.net/10986/19205 |
| _version_ |
1764439562003677184 |
| spelling |
okr-10986-192052021-04-23T14:03:42Z Assessing the Impact of Communication Costs on International Trade Fink, Carsten Mattoo, Aaditya Neagu, Ileana Cristina ABSOLUTE VALUE AGGREGATE TRADE AGGREGATE TRADE FLOWS ARBITRAGE BILATERAL TARIFF BILATERAL TARIFFS BILATERAL TRADE CHANGES IN TRADE CIF COMMODITIES COMMODITY COMMUNICATION COSTS COMMUNICATION INFRASTRUCTURE COMMUNICATION NETWORKS COMMUNICATIONS COSTS CONSUMER PREFERENCES CONSUMERS CONSUMPTION LEVELS CUSTOMS DATA SOURCES DEMAND ELASTICITIES DOMESTIC PRODUCTS ECONOMETRIC MODELS ECONOMIC GEOGRAPHY ECONOMIC THEORY ECONOMIES OF SCALE ECONOMISTS ELASTICITY ELASTICITY OF SUBSTITUTION ELASTICITY OF TRADE EMPIRICAL ANALYSIS EMPIRICAL RESEARCH ENDOGENOUS VARIABLES EXCHANGE RATES EXOGENOUS VARIABLES EXPORTERS EXPORTS FACTOR ENDOWMENTS FINAL GOODS FIXED COSTS FOREIGN DIRECT INVESTMENT FORMAL ANALYSIS FREIGHT GDP GLOBAL TRADE GRAVITY EQUATION GRAVITY FRAMEWORK GRAVITY MODEL IMPERFECT SUBSTITUTES IMPORT TARIFF IMPORT TARIFFS IMPORTS INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INSURANCE INTERNATIONAL PRODUCTION INTERNATIONAL TELECOMMUNICATIONS INTERNATIONAL TRADE INTERNATIONAL TRANSPORT LABOR COSTS MACROECONOMICS MARGINAL COSTS MEASURE OF TRADE MONOPOLIES MONOPOLISTIC COMPETITION PATTERN OF SPECIALIZATION PATTERN OF TRADE PRODUCERS PRODUCT DIFFERENTIATION PRODUCTION PROCESSES SUBSTITUTION ELASTICITIES SUNK COSTS TARIFF BARRIERS TARIFF DATA TECHNOLOGICAL PROGRESS TELECOM INFRASTRUCTURE TELECOMMUNICATION TELECOMMUNICATIONS TELECOMMUNICATIONS OPERATORS TELECOMMUNICATIONS POLICY TRADE COSTS TRADE DATA TRADE FLOWS TRADE MODELS TRADE PATTERNS TRADE PERFORMANCE TRADE PREFERENCES TRADE THEORIES TRADE VALUES TRAFFIC TRANSPORT COSTS UTILITY FUNCTION VALUE OF EXPORTS VALUE OF TRADE VARIABLE COSTS Recent research suggests that trade costs influence the pattern of specialization and trade, but there is limited empirical research on the determinants of trade costs. The existing literature identifies a range of barriers that separate nations, but then typically focuses only on transport costs. Although communication costs figure prominently in intuitive explanations and casual observations, they have played little role in the formal analysis of trade costs. The authors seek to examine whether this neglect matters, and whether the inclusion of the magnitude and variation of communication costs across partner countries can add value to existing explanations of the pattern of trade. The authors develop a simple multi-sector model of "impeded" trade that generates hypotheses in a gravity-type estimation framework. The main proxies for bilateral communication costs are the per-minute country-to-country calling prices charged in the importing and exporting countries. The use of bilateral variations in prices yields estimates that are superior to the ones obtained from country-specific measures of communication infrastructure used in previous studies. The authors find that international variations in communication costs have a significant influence on bilateral trade flows, at the aggregate level and for most individual sectors disaggregated according to the 2-digit SITC classification. Since information and communication needs are likely to be much greater for differentiated goods, the authors test whether trade in these products is more sensitive to variations in the costs of communication. Using the Rauch classification of product heterogeneity, the estimates suggest that the impact of communication costs on trade in differentiated products is as much as one-third larger than on trade in homogenous products. Finally, the authors verify, to the extent possible, that the significance of communication costs is not driven by their endogeneity or by omitted variables. 2014-08-01T18:32:59Z 2014-08-01T18:32:59Z 2002-11 http://documents.worldbank.org/curated/en/2002/11/2079746/assessing-impact-communication-costs-international-trade http://hdl.handle.net/10986/19205 English en_US Policy Research Working Paper;No. 2929 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |