Comparative Advantage, Geographic Advantage and the Volume of Trade

James Rauch

Economic Journal, 1991, vol. 101, issue 408, 1230-44

Abstract: A functional relationship between the degree of a country's comparative advantage and the volume of its net exports of any good to its trading partner is established using a model with per-unit-distance transportation costs between countries' coasts and their interiors. The greater a country's comparative advantage, the deeper its exports penetrate geographically into its trading partner. The internal spatial structure of a country consists of cities on a river. It is shown that population sizes, wage rates, and residential rental rates are greatest in the port city and decline monotonically as one moves inland. Copyright 1991 by Royal Economic Society.

Date: 1991
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Working Paper: Comparative Advantage, Geographic Advantage, and the Volume of Trade (1990)
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