Time Zones, Outsourcing and Patterns of International Trade

Toru Kikuchi

Economics Bulletin, 2006, vol. 6, issue 15, 1-10

Abstract: This paper proposes a three-country model of business services trade that captures the role of time zones in the division of labor. The connectivity of business service sectors via communications networks (e.g., the Internet) is found to determine the structure of comparative advantage. That is, two countries with connected service sectors have a comparative advantage in the good that requires business services. It is also shown that the third country inevitably specializes in the good that does not require business services.

JEL-codes: F1 (search for similar items in EconPapers)
Date: 2006-11-04
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Citations: View citations in EconPapers (15)

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