Time as a Determinant of Comparative Advantage

Time as a Determinant of Comparative Advantage

It is assumed that added time to export adds cost to and lowers the volume of trade. Time delays may also affect the composition of trade and can disproportionately reduce trade in time-sensitive goods. This paper investigates the validity of these...

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Bibliographic Details
Main Authors: Li, Yue, Wilson, John S.
Format: Policy Research Working Paper
Language:English
Published: 2012
Subjects:
ADVERSE EFFECTS
AGGREGATE TRADE
AGGREGATE TRADE FLOWS
AGRICULTURE
AIR
AIR TRANSPORT
AUTOMOTIVE SECTOR
BILATERAL TRADE
BORDER TRADE
CAPITAL INVESTMENTS
CAPITAL STOCK
COMPARATIVE ADVANTAGE
COMPARATIVE ADVANTAGES
CONSUMERS
COST-BENEFIT ANALYSIS
CUSTOMS ADMINISTRATION
CUSTOMS CLEARANCE
DEVELOPMENT ECONOMICS
DEVELOPMENT RESEARCH
DOMESTIC MARKET
ECONOMIC RESEARCH
EFFICIENCY OF INFRASTRUCTURE
ELECTRONICS INDUSTRY
EXCHANGE RATES
EXPORT GROWTH
EXPORT INTENSITY
EXPORT MARKET
EXPORT MARKETS
EXPORT ORIENTATION
EXPORT PERFORMANCE
EXPORTERS
EXPORTS
EXTERNAL FINANCE
FACTOR ENDOWMENTS
FINANCIAL RESOURCES
FOREIGN MARKET
FOREIGN MARKETS
FOREIGN OWNERSHIP
FOREIGN SALES
FREIGHT
GDP
GDP PER CAPITA
GLOBAL MARKETS
GLOBAL TRADE
GLOBAL TRADE ANALYSIS
GROWTH POTENTIAL
HUMAN CAPITAL
IMPACT OF TRADE
IMPACT OF TRADE LIBERALIZATION
INCOME
INCOME LEVELS
INCREASING RETURNS
INEFFICIENCY
INFLATION RATES
INFRASTRUCTURE INVESTMENT
INLAND TRANSPORT
INSPECTION
INTERMEDIATE INPUTS
INTERNATIONAL PRODUCTION
INTERNATIONAL TRADE
INTERNATIONAL TRANSPORT
INVENTORY
MACHINERY
MANUFACTURING PRODUCTIVITY
MARGINAL EFFECTS
MARKET DEVELOPMENT
MARKET SHARES
METHODOLOGY
PATTERN OF TRADE
PRODUCTIVITY
REGULATORY POLICIES
RESEARCH WORKING PAPERS
SHIPPING CONTAINERS
SUNK COSTS
SURVEY DATA
SURVEY INSTRUMENTS
TARIFF BARRIERS
TARIFF RATES
TECHNIQUES
TERMS OF TRADE
TOTAL COSTS
TRADE BARRIERS
TRADE COSTS
TRADE EFFECT
TRADE FACILITATION
TRADE FLOWS
TRADE LIBERALIZATION
TRADE PATTERNS
TRADE POLICIES
TRADE POLICY
TRADE THEORIES
TRADE VOLUMES
TRANSIT
TRANSPORT COSTS
TRANSPORT MODES
TRANSPORT SYSTEMS
TRANSPORTATION
TRANSPORTATION COST
TRANSPORTATION COSTS
VALIDITY
VALUE ADDED
VOLUME OF TRADE
WAGES
WORLD TRADE
WORLD TRADE ORGANIZATION
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091116085556
http://hdl.handle.net/10986/4320
Description
Summary:It is assumed that added time to export adds cost to and lowers the volume of trade. Time delays may also affect the composition of trade and can disproportionately reduce trade in time-sensitive goods. This paper investigates the validity of these propositions using the World Bank Doing Business database and Enterprise Surveys for 64 developing countries. The authors find that in countries where there is longer time needed to export firms in time-sensitive industries are less likely to become exporters. Moreover, firms that do export have lower export intensities. Their findings imply that time to export is a significant determinant of comparative advantage. For example, consider two industries that have the same export probability and intensity - but differ in time-sensitivity by one standard deviation. Action taken to cut time to export by 50 percent for one industry opens a 6 percentage point difference between the export probabilities of the two industries. In addition, steps to cut time delays increase export intensities by 1.9 percentage points. This impact applies to industries with different productivity levels -- and those in developing countries with different income levels.

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