Trade Variations due to Time Zones Related Distance and Delaying Costs: A Theoretical Exposition

Biswajit Mandal and Maitrayee Das

Manchester School, 2025, vol. 93, issue 3, 289-303

Abstract: This paper constructs a competitive trade model involving countries in two distinct time zone locations. Our results suggest that geographical distance positively impact service trade, in contrast to its harmful nature for goods trade. These results are not in line with the traditional gravity arguments of international trade. Our model also reveals an intriguing relationship: an increase in distance between trading nations results in higher skilled wages and lower rent in case of service trade, while goods trade yields the opposite effect. We then connect distance with delaying cost and find the effects of delaying cost on trade and factor prices. We further extend our basic model to introduce informal sector and government manufacturing sector. Despite these additions, the consistency in the effects of distance on factor prices and output persists.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/manc.12511

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:manchs:v:93:y:2025:i:3:p:289-303

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1463-6786

Access Statistics for this article

Manchester School is currently edited by Keith Blackburn

More articles in Manchester School from University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().