ICT: Trade in services and small countries

Hildegunn Nordas

No 330234, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper discusses how ICT-enabled trade in services such as education, entertainment and health affects their quality in small economies with shallow domestic markets. Consumer services need to be provided locally, but some of the content can be digitised and transmitted over long distances. A general equilibrium model of two asymmetric countries is developed and numerical simulations presented. Trade broadens the variety of content in the small country, but variety may be reduced in the large country due to fixed cost of entering foreign markets. Trade leads to a more equal distribution of income both between the small and the large country and within the small country.

Keywords: International Relations/Trade; Consumer/Household Economics (search for similar items in EconPapers)
Pages: 35
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:330234

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