Assessing the Impact of Communication Costs on International Trade

Fink, Carsten ; Mattoo, Aaditya ; Neagu, Ileana Cristina

World Bank, Washington, DC

关键词: ABSOLUTE VALUE;    AGGREGATE TRADE;    AGGREGATE TRADE FLOWS;    ARBITRAGE;    BILATERAL TARIFF;   

DOI  :  10.1596/1813-9450-2929
RP-ID  :  WPS2929

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Recent research suggests that tradecosts influence the pattern of specialization and trade, butthere is limited empirical research on the determinants oftrade costs. The existing literature identifies a range ofbarriers that separate nations, but then typically focusesonly on transport costs. Although communication costs figureprominently in intuitive explanations and casualobservations, they have played little role in the formalanalysis of trade costs. The authors seek to examine whetherthis neglect matters, and whether the inclusion of themagnitude and variation of communication costs acrosspartner countries can add value to existing explanations ofthe pattern of trade. The authors develop a simplemulti-sector model of "impeded" trade thatgenerates hypotheses in a gravity-type estimation framework.The main proxies for bilateral communication costs are theper-minute country-to-country calling prices charged in theimporting and exporting countries. The use of bilateralvariations in prices yields estimates that are superior tothe ones obtained from country-specific measures ofcommunication infrastructure used in previous studies. Theauthors find that international variations in communicationcosts have a significant influence on bilateral trade flows,at the aggregate level and for most individual sectorsdisaggregated according to the 2-digit SITC classification.Since information and communication needs are likely to bemuch greater for differentiated goods, the authors testwhether trade in these products is more sensitive tovariations in the costs of communication. Using the Rauchclassification of product heterogeneity, the estimatessuggest that the impact of communication costs on trade indifferentiated products is as much as one-third larger thanon trade in homogenous products. Finally, the authorsverify, to the extent possible, that the significance ofcommunication costs is not driven by their endogeneity or byomitted variables.