Information Matters: A Theoretical Comparison of Some Cross-Border Trade Barriers

Preprint

There is widespread evidence that geographical borders reduce trade. This paper presents a theoretical model capable of providing a succinct comparison of three broad forms of trade barriers involving i) trade costs, ii) localized tastes, and iii) information frictions. Despite being traditionally under-researched, it provides the stark finding that information frictions often provide the relatively more powerful marginal effect in reducing cross-border trade, and associated levels of welfare. This result remains robust under a number of extensions that further document the roles of product differentiation and alternative forms of trade costs.

Object Details

• Language: Englisch

Classification and Topics

• Classification: Wirtschaft ; Trade: General ; Oligopoly and Other Imperfect Markets
• Subject: Information Frictions ; Search Costs ; Trade Costs ; Localized Tastes ; Product Differentiation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Wilson, Chris M.
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2016-04-11T07:26:14Z

Further information

• Handle: http://hdl.handle.net/10419/130180
• Last update: 26.09.1972, 5:54 PM CET