Publication:
Assessing the Impact of Communication Costs on International Trade

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dc.contributor.authorFink, Carsten
dc.contributor.authorMattoo, Aaditya
dc.contributor.authorNeagu, Ileana Cristina
dc.date.accessioned2014-08-01T18:32:59Z
dc.date.available2014-08-01T18:32:59Z
dc.date.issued2002-11
dc.description.abstractRecent 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.en
dc.identifierhttp://documents.worldbank.org/curated/en/2002/11/2079746/assessing-impact-communication-costs-international-trade
dc.identifier.urihttps://hdl.handle.net/10986/19205
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2929
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectABSOLUTE VALUE
dc.subjectAGGREGATE TRADE
dc.subjectAGGREGATE TRADE FLOWS
dc.subjectARBITRAGE
dc.subjectBILATERAL TARIFF
dc.subjectBILATERAL TARIFFS
dc.subjectBILATERAL TRADE
dc.subjectCHANGES IN TRADE
dc.subjectCIF
dc.subjectCOMMODITIES
dc.subjectCOMMODITY
dc.subjectCOMMUNICATION COSTS
dc.subjectCOMMUNICATION INFRASTRUCTURE
dc.subjectCOMMUNICATION NETWORKS
dc.subjectCOMMUNICATIONS COSTS
dc.subjectCONSUMER PREFERENCES
dc.subjectCONSUMERS
dc.subjectCONSUMPTION LEVELS
dc.subjectCUSTOMS
dc.subjectDATA SOURCES
dc.subjectDEMAND ELASTICITIES
dc.subjectDOMESTIC PRODUCTS
dc.subjectECONOMETRIC MODELS
dc.subjectECONOMIC GEOGRAPHY
dc.subjectECONOMIC THEORY
dc.subjectECONOMIES OF SCALE
dc.subjectECONOMISTS
dc.subjectELASTICITY
dc.subjectELASTICITY OF SUBSTITUTION
dc.subjectELASTICITY OF TRADE
dc.subjectEMPIRICAL ANALYSIS
dc.subjectEMPIRICAL RESEARCH
dc.subjectENDOGENOUS VARIABLES
dc.subjectEXCHANGE RATES
dc.subjectEXOGENOUS VARIABLES
dc.subjectEXPORTERS
dc.subjectEXPORTS
dc.subjectFACTOR ENDOWMENTS
dc.subjectFINAL GOODS
dc.subjectFIXED COSTS
dc.subjectFOREIGN DIRECT INVESTMENT
dc.subjectFORMAL ANALYSIS
dc.subjectFREIGHT
dc.subjectGDP
dc.subjectGLOBAL TRADE
dc.subjectGRAVITY EQUATION
dc.subjectGRAVITY FRAMEWORK
dc.subjectGRAVITY MODEL
dc.subjectIMPERFECT SUBSTITUTES
dc.subjectIMPORT TARIFF
dc.subjectIMPORT TARIFFS
dc.subjectIMPORTS
dc.subjectINCOME
dc.subjectINCREASING RETURNS
dc.subjectINCREASING RETURNS TO SCALE
dc.subjectINSURANCE
dc.subjectINTERNATIONAL PRODUCTION
dc.subjectINTERNATIONAL TELECOMMUNICATIONS
dc.subjectINTERNATIONAL TRADE
dc.subjectINTERNATIONAL TRANSPORT
dc.subjectLABOR COSTS
dc.subjectMACROECONOMICS
dc.subjectMARGINAL COSTS
dc.subjectMEASURE OF TRADE
dc.subjectMONOPOLIES
dc.subjectMONOPOLISTIC COMPETITION
dc.subjectPATTERN OF SPECIALIZATION
dc.subjectPATTERN OF TRADE
dc.subjectPRODUCERS
dc.subjectPRODUCT DIFFERENTIATION
dc.subjectPRODUCTION PROCESSES
dc.subjectSUBSTITUTION ELASTICITIES
dc.subjectSUNK COSTS
dc.subjectTARIFF BARRIERS
dc.subjectTARIFF DATA
dc.subjectTECHNOLOGICAL PROGRESS
dc.subjectTELECOM INFRASTRUCTURE
dc.subjectTELECOMMUNICATION
dc.subjectTELECOMMUNICATIONS
dc.subjectTELECOMMUNICATIONS OPERATORS
dc.subjectTELECOMMUNICATIONS POLICY
dc.subjectTRADE COSTS
dc.subjectTRADE DATA
dc.subjectTRADE FLOWS
dc.subjectTRADE MODELS
dc.subjectTRADE PATTERNS
dc.subjectTRADE PERFORMANCE
dc.subjectTRADE PREFERENCES
dc.subjectTRADE THEORIES
dc.subjectTRADE VALUES
dc.subjectTRAFFIC
dc.subjectTRANSPORT COSTS
dc.subjectUTILITY FUNCTION
dc.subjectVALUE OF EXPORTS
dc.subjectVALUE OF TRADE
dc.subjectVARIABLE COSTS
dc.titleAssessing the Impact of Communication Costs on International Tradeen
dspace.entity.typePublication
okr.crosscuttingsolutionareaJobs
okr.date.disclosure2002-11-30
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2002/11/2079746/assessing-impact-communication-costs-international-trade
okr.globalpracticeTransport and ICT
okr.globalpracticeFinance and Markets
okr.globalpracticeTrade and Competitiveness
okr.guid416001468766470641
okr.identifier.doi10.1596/1813-9450-2929
okr.identifier.externaldocumentum000094946_02121104124846
okr.identifier.internaldocumentum2079746
okr.identifier.reportWPS2929
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2002/12/21/000094946_02121104124846/Rendered/PDF/multi0page.pdfen
okr.sectorInformation and communications
okr.sectorIndustry and trade :: Other domestic and international trade
okr.topicInformation and Communication Technologies::ICT Policy and Strategies
okr.topicInternational Economics and Trade::Free Trade
okr.topicPayment Systems and Infrastructure
okr.topicEconomic Theory and Research
okr.topicEnvironmental Economics and Policies
okr.topicIndustry::Common Carriers Industry
okr.topicFinance and Financial Sector Development
okr.unitTrade, Development Research Group
okr.volume1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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