Network externalities as a source of comparative advantage

Terence Chong ()
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Terence Chong: The Chinese University of Hong Kong

Economics Bulletin, 2005, vol. 6, issue 7, 1-9

Abstract: This note examines how the network externalities of communications activities and trading opportunities interact to determine the structure of comparative advantage between countries. These interactions are obtained by constructing a two-country, two-sector model of trade involving a communications network sector. The role of network interconnectivity, which allows users of a network to communicate with users of another network, is also explored. A comparative advantage in the good that requires network services is held by the countries with interconnected networks.

Keywords: network; externalities:; interconnectivity:; comparative; advantage (search for similar items in EconPapers)
JEL-codes: F1 L1 (search for similar items in EconPapers)
Date: 2005-06-01
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