Assessing the impact of communication costs on international trade |
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Authors: | Carsten Fink Ileana Cristina Neagu |
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Institution: | Development Research Group (DECRG), The World Bank, 1818 H Street, NW, Washington, DC, 20433 United States |
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Abstract: | Communication costs are frequently cited as an important determinant of trade costs. We test this relationship by incorporating alternative measures of communication costs in a model of bilateral trade. We find that international variations in communication costs indeed have a significant influence on trade patterns. Furthermore, estimates using disaggregated data reveal that communication costs are more important for trade in differentiated products than for trade in homogenous products. |
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Keywords: | International trade Trade costs Communication costs |
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